KPMG CEO Outlook 2025: Key Findings on AI Investment, Talent & Growth Strategy

KPMG CEO Outlook 2025 Overview

The KPMG 2025 Global CEO Outlook, now in its 11th edition, provides a comprehensive window into the strategic mindset of global business leaders. Surveying 1,350 CEOs from 11 key markets and 12 industry sectors between August and September 2025, the report captures how the world’s most influential executives are navigating an era defined by geopolitical volatility, technological disruption, and evolving workforce dynamics.

The central narrative emerging from this year’s findings is one of cautious optimism paired with aggressive investment. While confidence in the global economy has fallen to its lowest level in five years, CEOs remain remarkably positive about their own organizations. This paradox — pessimistic macro view, optimistic micro outlook — reflects a generation of leaders who have learned to thrive amid persistent disruption. As noted in McKinsey’s Global Institute 2025 analysis, this strategic resilience has become a defining characteristic of successful C-suite leadership.

All respondents oversee companies with annual revenues exceeding US$500 million, with a third managing companies generating more than US$10 billion annually. The survey spans critical economies including the United States, United Kingdom, Germany, France, Japan, India, China, and Australia, providing truly global perspective on executive strategy and sentiment.

Economic Outlook: Cautious Optimism Amid Uncertainty

CEOs’ confidence in the global economy has fallen to 68% — its lowest point in five years, down from 72% a year ago. This decline reflects the cumulative impact of geopolitical tensions, trade uncertainties, and the persistent aftershocks of recent global disruptions. Yet beneath this headline pessimism lies a more nuanced story of individual organizational confidence.

An impressive 79% of CEOs remain optimistic about their own organization’s prospects, with 61% forecasting earnings increases of 2.5% or more over the next three years. This gap between macro pessimism and micro optimism has widened compared to previous years, suggesting that leaders have increasingly decoupled their strategic planning from macroeconomic forecasts and are instead focusing on the factors within their direct control.

To mitigate structural risks and ensure competitiveness, CEOs are signaling intent through investment in people, AI, M&A, and organizational design. The top pressures influencing investment decisions include cybersecurity and digital risk resilience (cited by 39% of CEOs), regulatory compliance and reporting requirements (36%), and AI integration into operations and workflow (34%). These priorities reflect a business environment where technology and regulation have become intertwined drivers of strategic allocation.

The survey reveals that 72% of CEOs have already adjusted their growth strategies to tackle ongoing, interconnected challenges. This is not reactive crisis management — it represents a fundamental strategic recalibration that acknowledges disruption as a permanent feature of the business landscape rather than a temporary condition to endure.

AI Investment and Adoption Strategies

Artificial intelligence has moved from boardroom curiosity to strategic imperative. The KPMG CEO Outlook 2025 reveals that 71% of CEOs are strongly backing AI investment as a key growth driver. More critically, 69% are allocating up to a fifth of their total budget to AI — a substantial commitment that signals the technology has crossed the threshold from experimental to essential.

Perhaps the most striking shift is in return expectations. In 2024, most CEOs projected AI returns within three to five years. This year, 67% expect results within one to three years, with 19% anticipating meaningful returns within just six months to one year. Only 14% still hold the longer three-to-five-year or beyond timeline. This compressed ROI expectation reflects both the rapid maturation of AI tools and the growing pressure on leaders to demonstrate tangible value from their technology investments.

“It’s clear from our findings that CEOs are finding opportunities from disruption by investing boldly in technology, innovation and talent.” — Bill Thomas, Global Chairman & CEO, KPMG International

CEOs see experimentation as critical to scaling AI adoption, with 84% believing that employee experimentation at all levels is key and that everyone should be encouraged to take part. Nearly half (46%) say they are communicating openly with employees about the potential impact of AI on roles, recognizing that transparency is essential for organizational buy-in. This aligns with findings from the McKinsey State of AI 2025 report, which similarly emphasizes the importance of broad-based AI literacy across organizations.

The Rise of Agentic AI in Enterprise

A particularly forward-looking finding is that 57% of CEOs expect agentic AI to have a significant impact on their organization alongside generative AI. This signals that enterprise AI strategy is already evolving beyond the chatbot and content generation paradigm toward autonomous systems capable of executing multi-step business processes with minimal human oversight.

However, this optimism about agentic AI comes with recognized challenges. Three-quarters (76%) of leaders say their organization is ready for AI integration through robust governance, yet they also identify critical barriers including ethical challenges (59%), data readiness issues (52%), and lack of regulation (50%). The tension between eagerness to deploy and readiness to govern represents one of the defining challenges for enterprise AI adoption in the coming years.

Regulation is a particularly acute concern: 69% of CEOs say the pace of regulation — specifically its inability to keep up with the technology — will be a barrier to success. This creates a strategic paradox where leaders simultaneously want more regulatory clarity and fear that poorly designed regulation could stifle innovation. Steve Chase, KPMG’s Global Head of AI and Digital Innovation, notes that navigating this uncertainty requires leaders who can “embrace innovation while managing concerns over ethics, regulation, upskilling and access to talent.”

Talent Strategy: Reskilling for the AI Era

The workforce implications of AI represent a central strategic concern for CEOs. A strong majority (77%) agree that workforce AI readiness and upskilling will impact their organization’s prosperity over the next three years. Critically, 70% of leaders agree that competition for AI talent could constrain their organization’s success, making talent a potential bottleneck for AI-driven growth.

In response, boardrooms are taking active steps. The report reveals a multi-pronged talent strategy: 71% of CEOs are focusing on retaining and retraining high-potential talent, 67% are redesigning roles and career paths to reflect AI collaboration, 61% are actively hiring new talent with AI and broader technology skills, 59% are deploying staff from traditional roles to AI-enabled positions, and 41% are planning for workforce reduction in some areas.

The data challenges the simplistic narrative of AI replacing workers. With 92% of leaders planning to increase headcount, the story is one of workforce transformation rather than elimination. Roles are being redesigned, not eliminated — but the skills required are changing dramatically. AI has already made 79% of CEOs rethink how they train and develop employees, fundamentally reshaping corporate learning and development strategies.

Engaging employees in this transition is acknowledged as crucial but challenging. Sixty-three percent of CEOs are concerned about the possible impact of AI on company culture, and a third (33%) recognize that some employees’ unwillingness to adopt new technologies poses a direct challenge to transformation efforts. These findings mirror similar workforce dynamics discussed in the Federal Reserve’s Financial Stability Report 2025, which examines how technological shifts impact labor market dynamics.

Workforce Demographics and Generational Shifts

Beyond AI-specific talent challenges, CEOs are grappling with broader demographic shifts. An overwhelming 88% of leaders see labor market shifts and demographic changes — particularly an aging workforce — as having moderate to high impact on recruitment, retention, and culture. Nearly a third (30%) highlight growing generational gaps on key future skills, while a quarter (24%) worry about the number of employees retiring coupled with a lack of skilled replacements.

Managing the multi-generational workplace has become a new strategic item on the boardroom agenda. Today’s workforce spans five generations, each with different expectations about work-life balance, technology adoption, career development, and organizational loyalty. As Sandy Torchia, KPMG’s Global Co-Head of People, emphasizes, “it’s the human factors that will attract talent” — making a rounded and people-centered employee value proposition essential, not optional.

ESG and Sustainability Commitments

Despite the politicization of ESG in certain markets, the KPMG CEO Outlook reveals that most corporate leaders remain strongly committed to sustainability goals. A notable 61% of CEOs say they are on track to hit their 2030 net-zero targets — a significant jump from just 51% a year ago. This increase may reflect businesses reviewing and reassessing their interim climate goals to be more realistic and aligned with core business strategy rather than aspirational targets disconnected from operational reality.

Two-thirds (65%) of CEOs say they have fully embedded sustainability into their business and believe it is critical to long-term success. However, a gap remains between strategic commitment and capital allocation — only 29% say sustainability considerations are comprehensively integrated into capital expenditure decisions, suggesting significant room for improvement in translating ESG ambitions into financial planning.

The biggest hurdles to achieving net-zero ambitions are the complexity of decarbonizing supply chains (25% of CEOs), lack of skills and expertise (21%), and cost considerations (11%). Interestingly, cost has become a lesser concern, broadly unchanged from a year ago, suggesting that the economics of decarbonization are becoming more favorable even as operational challenges persist.

CEOs are increasingly recognizing AI as a tool for sustainability. The top AI-enabled sustainability use cases include improving data quality and reporting (79%), identifying resource efficiency opportunities (79%), and reducing emissions and improving energy efficiency (78%). This convergence of AI and ESG strategy represents a potentially powerful accelerator for corporate sustainability goals. The Bain Global Private Equity Report 2024 similarly highlights how investors are increasingly evaluating companies on their integrated technology-sustainability strategies.

Risk Resilience and Cybersecurity

In this environment of persistent disruption, risk resilience remains an indispensable attribute for business leaders. Economic uncertainty has emerged as the top threat identified by CEOs, but the risk landscape extends across multiple domains. Cybersecurity and digital risk resilience tops the list of investment priorities at 39%, reflecting the growing recognition that digital transformation creates new attack surfaces that must be secured.

Data protection and ethical use of AI constitute a major concern, with regulatory compliance and reporting at 36%. The intersection of technology risk and regulatory risk creates a complex landscape that requires coordinated approaches across IT, legal, compliance, and strategy functions. CEOs report that greater agility and faster decision-making (26%), transparency in communication (24%), and the ability to identify, prioritize, and manage risks (23%) are the top leadership capabilities needed in this environment.

M&A and Growth Strategy

Despite economic uncertainty, CEOs remain bullish on mergers and acquisitions as a growth strategy. An impressive 89% anticipate M&A activity with moderate to significant impact over the next three years. This strong M&A appetite reflects a strategic view that inorganic growth — particularly acquiring capabilities in AI, data analytics, and digital infrastructure — offers faster paths to competitiveness than building from scratch.

The majority of leaders anticipate rising revenues and an increased workforce over the next three years, driven by the combination of technology investment, talent development, and strategic acquisitions. This growth orientation exists alongside a clear-eyed assessment of risks, creating what might be characterized as “offensive defense” — growing the business while simultaneously building resilience against potential downturns. Analysis from the NVIDIA FY2025 annual report confirms that technology sector M&A has accelerated significantly, driven by AI capability acquisition.

The Evolving Role of the CEO

The KPMG survey reveals a profound evolution in the CEO role itself. Fifty-nine percent of leaders believe that expectations and complexity have evolved significantly in the last five years. Nearly a quarter (23%) single out AI and broader digital literacy as essential leadership skills — a remarkable shift for a position traditionally defined by financial acumen and operational excellence.

Eighty percent of leaders report feeling under more pressure to ensure the long-term prosperity of the business. However, this pressure level is largely unchanged from a year ago, suggesting that business leaders have normalized what was once considered extraordinary stress. Change and challenge have become the “new normal,” and leaders are rising to the occasion.

The report underscores that the most successful CEOs are those who can balance innovation with responsibility, embrace market volatility while focusing investments strategically, and maintain both organizational agility and risk discipline. As Bill Thomas notes, “the leaders who can embrace market volatility and focus investments in the right strategic areas for their organization will be the ones best placed to unlock new opportunities and build sustainable, long-term growth.”

The KPMG 2025 CEO Outlook paints a picture of a global business community that has adapted to permanent disruption. Rather than waiting for stability to return, leaders are investing aggressively in the technologies and talent that will define competitive advantage in an AI-driven economy. With 83% of leaders acknowledging the need to balance local and centralized approaches across changing political landscapes, the coming years will test whether this strategic ambition translates into sustained organizational performance and societal value creation.