Business execs doubling down on their AI investments
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A majority of senior executives across multiple industries expect artificial intelligence (AI) to fundamentally reshape their businesses in the next 12 to 24 months, according to KPMG’s latest AI Quarterly Pulse Survey. The report found that 56% of leaders anticipate significant transformation within the next year alone, jumping to 67% within two years—underscoring the swift pace at which AI is evolving from a strategic discussion into an operational transformation imperative.
Skyrocketing Investments and Shifts in Strategy
According to the survey, 68% of executives plan to invest between $50 million and $250 million into generative AI (GenAI) over the next 12 months, marking a substantial increase from 45% in Q1 of 2024. Business leaders seem to be moving from pilot programs to major budget allocations, with half of them already scaling their GenAI initiatives, up from just 10% half a year ago. This surge in investment signals a recognition amongst business leaders that AI is no longer a niche, technical concept but a near-term requirement for staying competitive.
With responses from 100 U.S.-based C-suite leaders at companies earning $1 billion or more in annual revenue, the KPMG’s Quarterly Pulse Survey findings closely mirror other market research reports emphasizing the rapid enterprise adoption of AI. For example, Deloitte’s “State of AI in the Enterprise” survey also underscores how C-level enthusiasm has led to notable AI budgets, even amid economic uncertainties.
Similarly, a recent survey of executives from the Boston Consulting Group and insights from researchers at Stanford’s Human-Centered AI (HAI) have both produced results highlighting the increased acceleration and investment in AI-powered business transformation. These studies and surveys highlight the growing expectation that AI will soon become indispensable across multiple business functions.
Top Challenges: Data Quality and Economic Volatility
While organizations are bullish about AI’s potential, 88% cite macroeconomic pressures as a key factor influencing their AI strategies, both now and for the foreseeable future. Another significant hurdle is the integrity of organizational data itself, with 85% of respondents naming data quality as the biggest challenge on the horizon, followed by data privacy, cybersecurity, and employee adoption. This concern underscores how AI success hinges not only on sophisticated algorithms but also on high-quality, well-governed data.
AI Agents on the Rise, But Adoption Lags
One of the most eye-catching insights revolves around AI agents. More than half of surveyed organizations (51%) are exploring the use of these agents, while 37% are piloting them. However, only 12% of surveyed respondents have actually deployed AI agents for real-world use. This difference between interest and deployment could reflect both the complexity of AI agent technology and the regulatory, ethical, and workforce readiness issues that inevitably arise when introducing these tools into core business operations.
“Our latest pulse survey confirms what we’re seeing with clients: organizations are doubling down on AI investments,” said Steve Chase, Vice Chair of AI & Digital Innovation at KPMG. “The data also shows growing momentum around AI agents, with over half of organizations exploring their use. Leaders are putting real dollars behind agents, but with mounting pressure to demonstrate ROI, getting the value story right is critical.”
A Leadership-Driven Trend, With Training Gaps
In a counterintuitive twist, the C-suite (71%) and executive management (58%) appear to be using GenAI tools more actively than middle managers (26%) and entry-level employees (15%). Although more than 80% of companies plan to incorporate GenAI training into formal performance development tracks, only 24% of employees currently leverage AI in their existing workflows on a weekly basis. This suggests that while leaders are sold on the technology’s benefits, rank-and-file adoption could stall if not accompanied by robust training and simplified AI integration into daily tasks.
Whether it’s AI agents or executive training, one thing is clear: AI’s transformative power is no longer a hypothetical. It’s here, and it’s accelerating.
