After a lot of big talk about AI, CEOs say the real upheaval is still ahead.
In a KPMG US survey, three-quarters of large-company CEOs said generative AI might have been overhyped in the past year, but its true impact and “disruptive potential” over the next five to 10 years is likely underappreciated.
“The sentiment about deploying AI is most certainly accelerating,” Tim Walsh, the company’s US chair and CEO, told Business Insider.
He said that many organizations are moving beyond pilot stages into implementation. The investments are taking place in what he called an “environment of disruption.”
KPMG US conducted the survey of 100 CEOs of large US-based companies from late January to mid-February on topics ranging from AI to hiring plans to the economy.
Most CEOs are still spending on AI
One in four CEOs polled believes an AI investment bubble exists, yet AI remains a key spending category, with nearly 80% of chiefs saying they will allocate at least 5% of their capital budgets to AI this year.
About two-thirds of leaders said they are boosting their cybersecurity spending amid growing fears about risks associated with AI.
Six in 10 CEOs said they are prioritizing AI spending on building workers’ skills. About half said they’re using funds to speed innovation and incorporate the technology into day-to-day operations.
While AI training is likely welcome news to workers worried about AI taking their work, about one in five CEOs still expects to cut jobs over the next year.
Asked about the effect of AI, about half expected modest or significant hiring, while just 9% said they expect the technology to result in job reductions.
Recruiting challenges
At KPMG, Walsh said, AI is allowing workers to “do things more effectively, to do more of it and to do it faster.”
That doesn’t necessarily mean the company will need fewer workers. If a hypothetical team had 20 people before AI, it might now have only 17, he said. At the same time, Walsh added, there might also be five people on the tech side handling tasks such as data extraction, analysis, and transformation to run the actual AI. All told, that would bring the team above 20.
Other CEOs struck a similar note, even as 61% said they worry they won’t be able to recruit workers with the technical expertise required.
Beyond staffing levels, some execs are concerned that AI could stunt leadership development. Roughly one in three CEOs cited reduced opportunities for early-career employees to build judgment via experience as their primary concern. Others pointed to overreliance on AI in decision-making and, to a lesser degree, diminished exposure to ambiguity and trial-and-error learning.
Big worries about cybersecurity
Six in 10 said that the speed of AI innovation and risk management is the factor most likely to affect their companies’ prosperity over the next three years.
Bosses’ fears about security are acute. About nine in 10 CEOs reported being concerned about data and privacy risks posed by AI agents and AI-assisted malware attacks. A similar share pointed to concerns about AI-driven phishing, while eight in 10 cited insider threats from AI agents.
About six in 10 CEOs remain worried about quantum computing attacks against encryption.
Walsh said corporate leaders he speaks with are concerned about the acceleration of cyber risks and what part AI and agents might play.
Just over two-thirds of CEOs said that they’re apprehensive about their ability to attract the cybersecurity talent they need. About six in 10 leaders are responding by training existing employees.
Economic concerns
CEOs’ views on their company’s prospects and those of the broader economy revealed a split screen. While 86% expressed confidence in their own industry’s growth and 83% in their company’s prospects over the next year, that conviction dropped when asked about the broader economy: Just 55% feel good about US growth and 53% in global growth.
KPMG US conducted the survey before the start of the war with Iran, and the resulting spike in oil prices, though the buildup had been underway.
Just over half of CEOs saw policy uncertainty — factors such as tariffs, interest rates, and regulation — as the main pressure driving short-term decision-making.
A hunger for deals
Even as they juggle a host of worries, most CEOs still have an appetite for dealmaking. Nearly two-thirds said their companies would “seriously pursue” transactions in 2026, while another quarter plan to hold off until 2027.
Walsh said that in the last six months or so, large-cap deals have picked up. He said he’s also now seeing an uptick in midsize transactions.
In the survey, about half of CEOs reported that there is sufficient market certainty to make “significant” investment decisions, though one in five said unpredictability hampered their ability to do so.
The interest in deals is a shift from a year ago, when M&A activity took a hit over uncertainty about tariffs, Walsh said.
“Businesses were just trying to navigate their day-to-day, but we are seeing a sustained increase in that activity in the markets,” he said.
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