In its October release, KPMG highlighted in the U.S. CEO Outlook Survey that a growing number of corporate leaders are grappling with what it calls “compound volatility.” This term describes the simultaneous forces of elevated geopolitical tensions, economic headwinds, tightening regulations, rising cyber risks, and the revolutionary—but complex—adoption of generative artificial intelligence (GenAI).
The survey, conducted among 100 U.S. CEOs of companies generating at least $500 million annually, brings into sharp focus how C-suite executives are responding to today’s multidimensional instability. According to the data, 69 percent of leaders have raised spending on cybersecurity, and 74 percent have revised their growth strategies to incorporate GenAI, mergers and acquisitions (M&A), talent development, and sustainability efforts. Despite the volatile backdrop, 85 percent of CEOs believe their companies will emerge stronger by acting strategically.
Cybersecurity has become a central concern for U.S. CEOs. As generative AI expands across industries, it also introduces new vulnerabilities. Paul Knopp, KPMG U.S. Chair and CEO, warns that threat levels on cyber risk are “flashing red” in the eyes of CEOs, especially as AI capabilities continue to evolve both inside and outside the organization. A parallel global survey from PwC similarly found that two-thirds of CEOs anticipate a sharp increase in cybersecurity threats, significantly driven by GenAI. This has led to a substantial increase in cybersecurity budgets, with executives investing in not just defensive infrastructure, but also in proactive measures such as AI-enhanced threat detection and real-time breach response capabilities. Despite these efforts, Axios reports that only about 20 percent of firms feel adequately prepared to face AI-driven attacks.
Generative AI, while seen as a risk, is also viewed as a key strategic tool. Seventy-four percent of U.S. CEOs have embedded AI into their core business strategies. AI is being adopted to improve efficiency in functions ranging from finance and marketing to R&D. However, many executives remain cautious. A separate report from KPMG found that 68 percent of CEOs wish to adopt GenAI but are hesitant due to unresolved ethical and legal concerns. As a response, most CEOs—95 percent—are implementing training programs focused on AI ethics, transparency, and compliance to ensure responsible adoption.
Talent management is another pressing issue. Nearly three-quarters of CEOs acknowledge a need to upskill their workforce to meet the demands of a hybrid work environment and AI-driven operations. Although many companies are investing in digital tools, only about 38 percent of executives globally believe their employees have the necessary skills to fully capitalize on AI. In the U.S., 72 percent of CEOs plan to expand hiring in the coming year, with a minimal percentage projecting workforce reductions. Upskilling is seen as not only a way to retain talent but also a critical enabler of AI integration and long-term productivity.
In the face of economic uncertainty, M&A activity has become a favored strategy among CEOs. Rather than relying solely on organic growth, many are seeking to acquire firms that bring new capabilities, especially in areas like AI and cybersecurity. M&A is now listed among the top funding priorities for U.S. CEOs over the next three years. This strategy reflects a broader shift towards building resilience and expanding into new regulatory and technological domains.
Sustainability and regulatory compliance are gaining renewed attention as well. CEOs are being forced to navigate increasingly complex environmental, social, and governance (ESG) requirements, including global tax standards like Pillar Two and expanded disclosure rules. While ESG may not yet top the list of immediate priorities, many executives are aware that failure to act could lead to operational risks and reputational harm. With the politicization of ESG topics in the U.S., business leaders must tread carefully, balancing compliance with public sentiment and shareholder expectations.
Despite the uncertainty on multiple fronts, confidence among U.S. CEOs remains relatively high. KPMG’s data indicates that 87 percent are optimistic about U.S. economic growth, while around 78 to 85 percent are confident in the global economy and their own companies’ future. However, overall CEO optimism has gradually softened since 2015, when confidence levels were near 93 percent. This year’s survey shows a more grounded yet resolute tone, reflecting both an awareness of new challenges and a readiness to confront them head-on.
Taken together, KPMG’s findings paint a portrait of leadership in a time of unprecedented complexity. CEOs are navigating a volatile global environment by embracing transformative technologies, reinforcing cybersecurity, upskilling their workforces, and pursuing strategic acquisitions. The overwhelming consensus is clear: companies that move decisively—balancing innovation with risk management—will be best positioned to thrive in this new era.
