Press release
24 Nov 2023 

Asia-Pacific emerges as the top destination for expansion as CEOs look to generative AI to drive growth

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  • 71% of respondents are accelerating GenAI investments to maintain competitive advantage — but also say uncertainty creates challenges for adoption
  • 65% anticipate higher levels of growth in 2024
  • M&A appetite declines, but CEOs globally look to Asia-Pacific for acquisition and expansion opportunities

Asia-Pacific CEOs 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 Asia-Pacific CEOs find themselves acting under when it comes to the emerging technology. While more than two-thirds (71%) of Asia-Pacific CEOs see the need to act quickly on generative AI (GenAI) to avoid giving their competitors a strategic advantage, a similar proportion (71%) also report being stymied by uncertainty around this space, which makes it challenging to act quickly.

Conscious of its potential to disrupt their own business models, almost all Asia-Pacific CEOs (98%) are making or planning significant investments in GenAI. To fund these investments, 74% are re-allocating capital from other investment projects or technology budgets and 15% are raising new capital. But investing in an AI-enabled future is easier said than done: more than a quarter (28%) of CEO respondents say concerns around the risks of deploying AI is the biggest challenge to making capital allocation decisions on GenAI initiatives. Two-thirds (68%) also believe a surge in companies claiming to have AI expertise complicates decisions about identifying and implementing credible ecosystem partnerships and acquisition targets.

Yew-Poh Mak, EY Asia-Pacific Strategy and Transactions Leader, says:

“The potential for GenAI to reinvent the way companies operate cannot be ignored, and Asia-Pacific 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 (88%) have either completed or are in the process of hiring new talent with relevant GenAI skill sets. Many are also establishing pilots and partnerships with multiple companies.

Asia-Pacific emerges as the top investment destination despite lower appetite for M&A

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 Asia-Pacific CEOs continue to be on the offense when investing for the future, with a clear majority (84%) planning some kind of transaction in the next 12 months. However, M&A deal intentions have dropped significantly, with only 23% of Asia-Pacific CEOs planning M&A in the next 12 months (compared to 56% in July 2023). The appetite to pursue M&A is far higher in the US (52%), reflecting the strong uptick in dealmaking involving US companies seen in 3Q23.

Despite the downcast sentiment toward M&A, just over half of Asia-Pacific CEOs (53%) plan to expand operations in the next 12 months outside of their headquartered location. With a strong preference for expansion within the wider region, Asia-Pacific CEOs have identified China, Australia, Japan, India, and South Korea as their top five destinations when asked where they would look to outside of their headquartered market. The same holds true for CEOs globally, with their top five expansion destinations also in the Asia-Pacific region.

Mak says, “The current geopolitical and macroeconomic uncertainty sees CEOs take a more nuanced approach to how and where they might invest. Asia-Pacific has emerged as the preferred investment destination for CEOs globally. This underlines the attractiveness of Asia-Pacific with its strong growth prospects, critical role in global supply chains, technological developments, and a young and skilled workforce. It also reflects the regional focus of Asia-Pacific CEOs, who are looking to capitalize on opportunities and synergies in this diverse and dynamic region.”

Maximizing growth and profitability to fund transformations

The past four years have seen Asia-Pacific business leaders reacting quickly to shifting supply chains, changing consumer preferences, a fast-evolving regulatory landscape, and rapid changes in the growth, inflation, and interest rate environment. Yet, a significant number of respondents anticipate higher levels of revenue (65%) and profitability (60%) in 2024 compared with 2023.

With global economic growth expectations more likely to be revised on the downside in the near-term, companies are scrutinizing costs to protect their margins. The relative attractiveness of the Asia-Pacific region means CEOs will have to carefully balance the risks of reducing employee-related costs at a time when the ability to attract and retain talent is restricted, particularly in high-demand technical and technology roles.

There is a clear gap between CEOs in the Asia-Pacific and those in the Americas on approaches to managing talent costs. Asia-Pacific CEOs are less inclined to restructure their workforces (27% vs. 42% in the Americas), reduce bonuses (23% vs. 33%), and shift to contract work (31% vs. 41%).

Mak says, “Asia-Pacific CEOs are prioritizing agility and adaptability when it comes to managing labor costs. With employment markets still tight across much of the region, CEOs recognize they must strike a fine balance between maintaining a motivated, high-performing workforce and protecting their bottom line.

“Asia-Pacific CEOs need to scrutinize every area of their operations, from a product, asset, and geographic perspective, and decide which underperforming areas to jettison. Maximizing growth and profitability to fund transformations will be the key to unlocking long-term value creation for companies in an AI-focused future,” says Mak.

To read the full report, please visit: CEO Outlook Asia Pacific


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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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