KPMG LLP AI & Digital Innovation Quarterly Pulse Survey

NEW YORK, OCT 21, 2024 – Business leaders continue to make strategic investments to fuel their GenAI strategies, with a projected average spend of $37 million on inorganic expansion through M&A and another $30 million on data and analytics in the next 12 months, according to the KPMG AI & Digital Innovation Quarterly Pulse Survey.

Hiring new tech talent, collaborations with other companies and customer experience enhancements were also top investment priorities with an average expected spend of $25 million and $24 million, respectively.

“Despite trending skepticism in the media around GenAI, business leaders overwhelmingly see it as truly transformative. More and more, we’re seeing levels of investment in tech, data and talent to support GenAI that match the potential disruption on the horizon,” said Steve Chase, Vice Chair of AI & Digital Innovation. 

Amidst pressures to demonstrate returns, 44% of leaders acknowledge they are still scaling the technology across their enterprise. While most have progressed past the research, experimentation and planning phases of their GenAI journeys, only 15% report having established measurable business outcomes and tangible growth.

Those leading AI strategies evolves beyond the CEO

As GenAI strategies gain significance across the enterprise, 42% of leaders are planning to or have already hired new leadership to oversee their organization’s GenAI initiatives, an increase from 27% in the previous quarter.

Nearly a third (31%) of CEOs are still at the helm of their organization's strategies, however, these responsibilities are increasingly being shared across the C-suite as demands grow and organizations adopt longer-term strategies that demand executive level focus and oversight.  Chief Information Officers are the second most likely to lead initiatives (31%), followed by Chief Operating Officers and Chief Innovation Officers (both 13%). Most senior leaders (70%) have been provided mandatory training, a stark contrast to the 28% of employees that have been provided mandatory training to-date.

“CEOs are placing a premium on appointing senior leaders to drive enterprise-level transformation and have high expectations for their executive teams to fully embrace the technology,” said Per Edin, US AI Leader and KPMG US Board Member. “CEOs and boards are mandating AI training for senior leadership teams to ensure they understand its transformative potential. However, organizations that fail to extend training to their broader workforce risk falling behind on the adoption curve and missing out on the value opportunities.”

Accelerating compliance and regulatory tracking ahead of the election

As the AI regulatory landscape continues to evolve, 67% of leaders are wary of regulatory changes, citing both over-regulation and under-regulation as a risk of the upcoming administration change. They are particularly focusing on presidential candidate stances regarding cybersecurity (46%), human oversight (43%) and data privacy (41%).

Most leaders (63%) say their organizations have already proactively introduced internal AI policies and governance in anticipation of future compliance requirements.

The KPMG quarterly pulse survey captures perspectives from 100 U.S.-based C-suite and business leaders representing organizations with an annual revenue of $1 billion or more.

Read additional findings below:

• 63% of leaders consider competition to be the most important metric influencing GenAI investment strategies, compared to 68% in the second quarter of the year.
• Revenue continues to be the top ROI metric (51%), followed by profitability (38%, up from 27% in the second quarter) and productivity (36%, down from 40% in the second quarter).
• Over half (52%) of executive management are using GenAI versus only 20% of entry level employees. Executives are also using GenAI more than people managers (41%) and middle managers (39%).
• 19% of leaders have recruited new board members to enable their GenAI strategies.
• Nearly half of leaders (48%) are concerned about cybersecurity and data privacy when it comes to GenAI adoption. Another 43% are concerned about environmental impact as it relates to GenAI consumption.
• 84% have dedicated staff to monitor and prepare for state regulations as they relate to GenAI. Another 56% have dedicated staff to monitor and prepare for federal regulations. 

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