Key Insights
Key takeaways from
"Is the AI buzz creating too much noise for CEOs to cut through?" report published by EY
CFTE summarised “Is the AI buzz creating too much noise for CEOs to cut through?” report by EY. The report 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.
Key Aspects
- This edition of our quarterly study of 1,200 CEOs globally, focuses on how they are continuing the journey into an AI-enabled future.
- – It also provides insights on capital allocation, investment and transformation strategies, as the economy reverts to a model with higher interest rates and inflation, more geopolitical headwinds but fewer economic tailwinds.
Table of Contents
- Chapter 1 — The emerging AI strategy agenda
- Chapter 2 — Potential winners emerging in the new economic environment
- Chapter 3 — Reassessing risks and resetting the talent cost base
- Chapter 4 — Investing now for a clear competitive advantage
Key Findings and Insights
This report will give you an insight into:
- The survey clearly reflects that when it comes to AI, CEOs find themselves acting with urgency. But there is a tension. Seven in 10 (70%) recognize that their organization must act now on GenAI to avoid giving their competitors a strategic advantage. At the same time, nearly the same percentage (68%) agree that the uncertainty around GenAI makes it challenging to move quickly in developing and implementing an AI strategy.
- More than two-thirds (70%) of CEOs also acknowledge that GenAI will challenge them to disrupt their own business model to maintain competitive advantage.
- This survey finds that while progress is being made across these initiatives – 92% of CEOs report having completed at least one – only 17% have completed more than half of the eight initiatives assessed. While this means there is still time for CEOs to establish the AI capabilities necessary for long-term growth, that window to get ahead of the competition may rapidly close given continued focus and investment in the space.
- 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.
- The survey finds a clear split between companies anticipating growth in the next year and their ability to generate the free cash flow to fund investments in AI or other priorities and those not feeling as confident about their prospects in this new environment. For companies expecting higher growth, more than two-thirds (72%) also expect higher levels of profitability, with only 3% anticipating a decline in profitability. Conversely, for those expecting lower levels of growth, more than two-thirds (68%) are also planning for lower levels of profitability. This will impact their ability to invest to reshape their business in the new cycle.
- Most CEOs (93%) are making changes to their talent strategy to manage costs, with a majority aiming to do so without reducing headcount. That number drops for those expecting significant revenue growth.
- 36% of CEOs are restructuring or reducing the employee base.
- The survey finds a clear majority of CEOs (89%) are planning some form of transaction over the next 12 months. But there has been a sharp contraction in intentions to actively pursue acquisitions in the next 12 months, dropping from 59% in July to 35% in October. The major focus is now on joint ventures and strategic alliances, and divestments, which has remained steady since July, indicating a desire to reassess portfolios as well as being boosted by the reopening of Initial Public Offering (IPO) markets.
Key infographics
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