The survey also shows that the companies most in need of gains from AI – those anticipating declining revenue growth in 2024 compared with the prior year – are the furthest behind on adopting AI and least likely to be increasing investment.
Compared with CEOs expecting higher revenue growth, they have completed fewer initiatives to establish AI capabilities (1.9 vs. 3.4 on average) and are less likely to be increasing investment in research and development (R&D) in 2024 (35% vs. 80%).
While it makes sense that these companies have fewer resources to invest in AI, they may need to reconsider their approach. Some of the quickest gains from AI deployment are improvements in efficiency and productivity that can boost the prospects of slower-growth companies. In a separate EY survey¹, three-quarters (75%) of senior executives globally agreed that the capabilities and productivity of their employees would be enhanced by GenAI.
As CEOs define their AI strategy, they also need to be mindful of the expectations they set with stakeholders. This survey suggests that CEOs experiencing early success with GenAI may be overly optimistic about how quickly it will transform the rest of their business.
The majority (64%) of companies that have already experienced a significant impact from GenAI expect that it will redefine their entire business and operating model in two years or less — an impact that is significantly harder to achieve than early wins in revenue or efficiency.
Conversely, the majority (67%) of companies with deeper experience in AI – defined as having completed five or more initiatives to establish AI capabilities – expect it to take three to five years or more to achieve similar impacts.
This longer – and arguably more realistic – timeline suggests that AI and GenAI are unfamiliar territory for many CEOs. Setting and failing to meet lofty expectations may erode the confidence of employees and shareholders, making it more difficult to transform in the long run. To avoid this, CEOs should work closely with their Chief Technology Officers (CTOs) to ensure their expectations and strategic plans around AI are feasible given their current resources and capabilities.