KPMG’s CEO Outlook survey presents an annual look backstage on the points maintaining the highest enterprise leaders up at night time. Yearly, a whole bunch of leaders reply the decision from the Large 4 accounting agency to talk frankly and anonymously about key points that must solved, and 400 participated within the 2025 version. CEOs have a message for America: they only aren’t positive of, effectively, something.
Enterprise leaders informed KPMG—and its lately anointed chair and CEO, Timothy Walsh—that they’re wrestling with uncertainty throughout a number of completely different areas of their work. That is effectively documented and is to be anticipated, Walsh informed Fortune in an interview. “There’s this basic, as you’ll count on, basic dialog round enterprise uncertainty,” Walsh stated, including that he was inspired at the least to see the “alignment” when it comes to subjects arising in C-suite conversations.
Peeling again the survey information, Walsh revealed that an unsurprisingly sizable majority (89%) say tariffs will “considerably impression” their enterprise’ efficiency and operations over the approaching three years. And almost as many, 86%, stated their agency will enhance costs as wanted. They’re working arduous to get round this, with 85% saying their firm will try to shift its sourcing methods to attenuate the impression as a lot as potential. The panorama is so unsure that just about each CEO says they should make some type of change: 79% stated they’ve tailored their development plans.
Walsh talked to Fortune about uncertainty on tariffs and AI, and the significance of belief in a local weather of such uncertainty. CEOs are involved with one other advancing expertise with terrifying capabilities, Walsh stated: cyber and quantum. “That truthfully retains me up at night time.”
Cybersecurity’s quantum problem
Cybersecurity dangers stay elevated, particularly as quantum computing approaches. As for advances in quantum computing, Walsh stated it might at some point quickly be able to breaking all encryption, and corporations inform him that they’re doing full assessments. It’s a “large effort” to make sure that they’re not uncovered when that quantum computing functionality arrives, Walsh warned.
Including into the combination the capabilities of AI brokers and, Walsh stated, “in lots of instances, a nation-state-type funding,” he’s very involved about malware and deepfake-type applied sciences escalating at risk. Over the following three years, 82% of CEOs polled stated cybercrime and cyber insecurity was a prime pattern that would damage their group. Cyber threat was general the second-highest cited strain behind CEOs’ short-term selections. CEOs are most involved about fraud detection and prevention (65%) and id theft (52%), however additionally they stated they’ve plans in place to mitigate.
All that being stated, Walsh stated CEOs are “feeling optimistic as a result of they see so many development alternatives.” The financial system has been surprisingly robust regardless of all of the uncertainty, the tech sector is driving a really robust inventory market, and he even famous some “massive offers and transactions” are coming by in relation to M&A. “Capital flows are beginning to transfer and [be] a bit extra liquid.”
Tariffs and the AI factor
Walsh informed Fortune that tariffs are clearly the number-one factor on each CEO’s thoughts. And it’s not solely the very fact of tariffs however potential modifications to tariffs, and “the uncertainty round whether or not these tariffs will proceed to vary.” There’s an amazing want for companies to not solely think about what’s going to change however to get agile sufficient to work on their provide chains to be ready for future, nonetheless unsure, modifications to come back. To that finish, 34% of CEOs stated within the survey that provide chain resilience is the highest strain driving short-term selections, adopted by cyber safety dangers (29%) and world financial uncertainty (25%).
Walsh emphasised that tariffs are introducing a multi-dimensional problem for CEOs. “The CEOs I converse with are addressing tariff impacts in three areas: price take-out, provide chain optimization together with reshoring, onshoring issues, and finally pricing.” He stated KPMG is actively working with shoppers in all of these areas and sure, AI is a part of this transformation, too. The prominence of AI is one other layer of uncertainty being added to the image, however Walsh stated it’s serving to numerous CEOs: “AI isn’t just an effectivity play, CEOs are centered on innovating their enterprise fashions and introducing new income streams and merchandise.”
The AI hourglass to come back?
Walsh stated AI capabilities are altering shortly, and he acknowledged that firms are beginning to restructure in response. The survey discovered that CEOs “principally see an hourglass form” to their organizations in subsequent three years, Walsh stated, noting that’s typical with each new expertise deployment. He added that “nobody is aware of precisely the place [workforce shape] is headed … It’s a problem to forecast as AI advances quickly.” Within the survey, 35% stated they’re planning for workforce reductions in some areas over the following two to 5 years attributable to AI, and 69% see an hourglass with greater numbers of senior leaders and early-career employees and fewer within the center (one other 16% stated a vertical triangle, 13% a triangle and a couple of% an inverted pyramid).
Managers are going through new tasks, managing groups with built-in AI brokers, as an illustration. Walsh stated some CEOs describe groups with each folks and AI brokers on them, “and managers of these groups have to make sure [that] brokers full steps within the workflow course of, that brokers have good information inputs in order that their outputs will be relied upon, and repeatedly overview these outputs.” CEOs surveyed stated 86% of them see AI brokers turning into embedded workforce members subsequent yr, and half suppose managers might be primarily accountable for managing AI brokers’ efficiency versus, say, HR or IT.
Walsh agreed with Fortune‘s reporting that “human expertise” nonetheless matter as AI implementation exhibits the need of reviewing AI outputs. “Human expertise are critically vital,” Walsh stated. Though KPMG invests in and spends time upskilling its employees on AI and offering them with instruments and licenses, he stated he continues to remind leaders that “human-to-human relationships are vital … each internally and externally. Belief is extra vital than ever. Constructing belief with our groups, shoppers and guaranteeing we will belief outputs of expertise like AI.” Given the unsure local weather, he added, belief is at a premium. The highest change that CEOs see coming is retaining and re-training high-potential expertise (75%), adopted by redesigning roles to replicate AI collaboration (65%) and hiring AI-capable expertise (64%).
