Press release
24 Oct 2023  | London, GB

CEOs bet big on generative AI to gain competitive edge despite hurdles to adoption and M&A challenges

  • 70% of CEOs are accelerating GenAI investments to maintain competitive advantage 
  • 68% of CEOs say GenAI uncertainty creates challenges for adoption
  • M&A appetite hits nine-year low but CEOs double down on organic investments 

LONDON, 24 October 2023. CEOs globally recognize the potential of artificial intelligence (AI), but most are encountering significant challenges in formulating and operationalizing related strategies, according to the latest EY CEO Outlook Pulse survey.

The EY quarterly survey of 1,200 global CEOs, which provides insights on AI, capital allocation and investment strategies, reflects the difficulties and the urgency that CEOs find themselves acting under when it comes to the emerging technology. While more than two-thirds (70%) of CEOs see the need to act quickly on generative AI (GenAI) to avoid giving their competitors a strategic advantage, a similar proportion (68%) also report being stymied by uncertainty around this space, which makes it challenging to act quickly.

Conscious of it’s potential to disrupt their own business models, almost all CEOs (99%) are making or planning significant investments in GenAI. To fund these investments, 69% are re-allocating capital from other investment projects or technology budgets and 23% are raising new capital. But investing in an AI-enabled future is easier said than done: more than a quarter (26%) of CEO respondents say the rapid pace of GenAI progress is the biggest challenge to making capital allocation decisions on GenAI initiatives. Two-thirds (66%) also believe a surge in companies claiming to have AI expertise complicates decisions about identifying and implementing credible ecosystem partnerships and acquisition targets.

Andrea Guerzoni, EY Global Vice Chair – Strategy and Transactions, says:

“The potential for GenAI to reinvent the way companies operate cannot be ignored, and CEOs are making bold investments in the technology to solidify their competitive advantages and future-proof their organizations. However, CEOs know that companies with genuine GenAI capabilities can become game-changing allies or acquisitions, but the relentless hype around artificial intelligence has clouded their view of the landscape.”

Despite challenges, CEOs are investing in the future of the workforce to accelerate GenAI initiatives — a majority (87%) have either completed or are in the progress of hiring new talent with relevant GenAI skill sets. Many are also establishing pilots and partnerships with multiple companies.

CEOs double down on organic investments, but M&A appetite declines to 9-year low

As business leaders continue to grapple with macroeconomic headwinds, regulatory changes and geopolitical volatility, many still anticipate high levels of growth in the near term and are doubling down on investments in R&D and capex.

The EY survey reveals that CEOs continue to be on the offense when investing for the future, with a clear majority (89%) planning some kind of transaction in the next 12 months. However, M&A deal intentions dipped to the lowest level since 2014 with only 35% of CEOs planning M&A in the next 12 months. This can be attributed to the current geopolitical and macroeconomic uncertainty and also reflects the confusion on AI targets and the real-world drop-off in AI-focused M&A following a surge earlier this year.

The appetite to pursue M&A is far higher in the Americas region (47%) than in EMEA (29%) or Asia-Pacific (25%), reflecting the strong uptick in dealmaking seen in the region in 3Q23, especially deals involving US companies.

Guerzoni says, “The slowdown in M&A more broadly can be attributed to the current geopolitical and macroeconomic uncertainty, including the high-level cost of debt. The survey makes it clear that other two factors are kicking in: the softening in technology dealmaking, as activity normalizes and returns to lower pre-pandemic levels, and CEOs trying to understand the impacts of GenAI.”

Half of CEOs (50%) plan to expand operations in the next 12 months outside of their headquartered location. Despite lower-than-expected growth in China, Asia-Pacific has emerged as a prominent destination, with China, Australia, India, Japan and Singapore emerging as they top five destinations when asked where they would look to outside of their headquartered market.

Maximizing growth and profitability to fund transformations

The past four years have seen business leaders reacting quickly to shifting consumer behaviors, a resetting and reconfiguring of supply chains, an upending of the global energy market, and rapid changes in the growth, inflation and interest rate environment. Yet, a significant number of respondents anticipate higher levels of growth (66%) and profitability (65%) in 2024 compared with 2023.

With global economic growth expectations more likely to be revised on the downside in the near-term, CEOs should consider whether their own growth expectations reflect the slower global market projected over the next five years.

Guerzoni says, “It is possible that those CEOs planning for higher growth have already made the hard choices during the past few years, both in terms of competitive positioning and potential growth opportunities. For those yet to do so, challenging the existing business model based on the current and anticipated market conditions is an imperative step that needs immediate attention.

“CEOs need to scrutinize every area of their operations, from both a product and geographic angle, and decide which underperforming areas to jettison. Maximizing growth and profitability to fund this transformation will be the key to unlocking long-term value creation for companies,” says Guerzoni.

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About the EY 2023 CEO Outlook Pulse

On behalf of EY, in September and October 2023 FT Longitude, the specialist research and content marketing division of the Financial Times Group, conducted a survey of 1,200 CEOs from large companies around the world. This anonymous online survey aims to provide valuable insights on the main trends and developments impacting the world’s leading companies as well as business leaders’ expectations for future growth and long-term value creation. Respondents represented 21 countries (Brazil, Canada, Mexico, the United States, Belgium, Luxembourg, the Netherlands, France, Germany, Italy, Denmark, Finland, Norway, Sweden, the United Kingdom, Australia, China, India, Japan, Singapore and South Korea) and five industries (consumer and health, financial services, industrials and energy, infrastructure, technology, media and telecoms). Surveyed companies’ annual global revenues were as follows: less than US$500m (20%), US$500m–US$999.9m (20%), US$1b–US$4.9b (30%) and greater than US$5b (30%).

The CEO Imperative Series provides critical answers and actions to help CEOs reframe their organization’s future. For more insights in this series, visit

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