Proactive Investors - We know we should invest, we are investing, but implementation is tough as is gauging the return on that investment. These seem to be the conclusions and/or sentiments of an EY Outlook Pulse Survey on attitudes towards generative AI (GenAI) at the top of big business.
For the uninitiated, GenAI refers to artificial intelligence technologies that can generate new content, including text, images, and code, based on learning from existing data sets.
It is revolutionising whole industries from tech and publishing to accountancy and the legal profession.
Unsurprisingly then, UK CEOs are intensifying their investments in this technology to secure a competitive edge, but they are facing substantial strategic implementation challenges, according to the study, which gathered insights from 100 UK CEOs.
It reveals a strong consensus on the urgency of investing in GenAI. A striking 74% of respondents believe immediate action is necessary to prevent competitors from gaining a strategic advantage.
Underpinning this is a substantial commitment to capital investment in GenAI within the next year, with 99% of CEOs planning or making significant investments, and 51% reallocating capital from other budgets to fund these initiatives.
Despite this enthusiasm, the path to integrating AI into business strategies is fraught with challenges.
A total of 68% of company heads expressed concerns about the uncertainty surrounding GenAI, complicating the development and implementation of effective AI strategies.
Additionally, 30% are apprehensive about the risks associated with deploying AI within their organisations.
This uncertainty is further exacerbated by the difficulty in distinguishing between genuine AI expertise and mere 'hype', as 77% of UK booses surveyed reported a surge in companies claiming AI proficiency.
Silvia Rindone, UK&I Managing Partner for Strategy and Transactions at EY, emphasises the dual nature of this trend: “UK CEOs clearly see the huge opportunities that AI offers in its ability to drive productivity and provide a competitive advantage and, as a result, are making significant investments in AI technology.
"However, this optimism is also tempered with caution, with many grappling with how best to implement and future-proof AI strategies."
In addition to AI investment, the survey sheds light on broader economic sentiments among UK CEOs. Despite slower growth and rising operating costs, 58% remain optimistic about their profitability in 2024.
This optimism, however, is balanced with pragmatism, as 96% are taking measures to mitigate economic headwinds, including workforce restructuring and talent strategy shifts.
The survey also highlights the focus on strategic transactions, with 92% of CEOs expecting to pursue such activities in the next 12 months.
These transactions are predominantly aimed at bolstering technology innovation, with 48% considering strategic alliances or joint ventures, 45% contemplating divestitures, and 29% exploring mergers and acquisitions (M&A).
Rindone adds: “Despite economic headwinds, strategic transactions remain a priority for UK CEOs particularly when it comes to accelerating technology innovation.
"With new technologies emerging and maturing rapidly, we’re likely to see an acceleration in investment in digital assets – such as AI capabilities – leading to more transactions as companies look to either reinforce their market position or gain a competitive advantage.”
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