KPMG's CEO Outlook survey provides a yearly peek into the concerns occupying the minds of top business executives. Annually, numerous executives accept an invitation from a leading Big 4 accounting firm to share candid and confidential insights on critical challenges requiring resolution. And 400 people took part in the 2025 event. Chief executives are sending a clear signal to the nation: they're facing considerable uncertainty across the board.
KPMG, along with its new chair and CEO Timothy Walsh, heard from business leaders that they are facing significant uncertainty in multiple areas. Regarding their contributions. According to Walsh, speaking to Fortune in an interview, this is thoroughly documented and anticipated. "As one might anticipate, there's a widespread discussion about business uncertainty," Walsh stated, noting he was at least encouraged to s Look for topic alignment in C-suite discussions.
When analyzing the survey results, Walsh noted that, as expected, a substantial 89% of businesses anticipate tariffs will "significantly impact" their operations. Over the next three years in performance and operations. Furthermore, a substantial 86% indicated their company will adjust prices upwards when necessary. Companies are actively seeking solutions, with 85% indicating a corporate commitment to adjusting their supply chain approaches to lessen the consequences as much as Achievable. Given the volatile environment, nearly all chief executives feel the need to implement adjustments, with 79% reporting that they have modified their strategies for growth.
Walsh discussed tariff and AI uncertainty, emphasizing the critical role of trust amidst this volatility with Fortune. Walsh stated that CEOs are worried about a developing technology possessing frightening abilities. "That honestly keeps me up at night."
Cybersecurity’s quantum challenge
The threat landscape in cybersecurity continues to be a serious concern, particularly with the impending advent of quantum computing. Regarding quantum computing advancements, Walsh stated that it may soon possess the capability to compromise all encryption, and businesses have informed him they are taking steps. Comprehensive evaluations. Walsh cautioned that it will take a "tremendous undertaking" to safeguard them once quantum computing becomes a reality.
Walsh expressed significant concern about malware, especially when considering the capabilities of AI agents and, in many instances, "a nation-state-type investment." And sophisticated fake-content generation technologies pose growing risks. In the upcoming three years, a survey indicated that 82% of polled CEOs identified cybercrime and insecurity as a significant trend poised to negatively impact their companies. Cybersecurity concerns were the second most frequently mentioned challenge, following closely behind the short-term decisions made by CEOs. Concerns for CEOs primarily revolve around fraud detection and prevention (65%) and identity theft (52%), though they indicated that mitigation strategies are already established.
Despite these considerations, Walsh indicated that CEOs are expressing optimism due to abundant growth prospects, noting the economy's unexpected resilience. Even with considerable ambiguity, the technology industry is powering a robust stock market, with him also mentioning the anticipation of significant deals and transactions. In the realm of mergers and acquisitions. Capital is beginning to circulate more freely, showing increased liquidity.
Tariffs and the AI element
Tariffs are undeniably the primary concern for every CEO, Walsh informed Fortune. Beyond the actual tariffs themselves, the possibility of their alteration, and "the uncertainty surrounding their ongoing fluctuation," are also significant factors. Businesses face a significant imperative to anticipate upcoming shifts and cultivate the agility necessary to fortify their supply chains accordingly. For upcoming, yet unknown, developments. In line with this, 34% of chief executives indicated in the survey that bolstering supply chain resilience is the primary factor influencing immediate strategic choices, with cybersecurity being the next most significant concern. Risks (29%) and uncertainties in the global economy (25%).
Walsh highlighted that tariffs are presenting CEOs with a multifaceted problem. The chief executives I engage with are tackling the effects of tariffs across three primary fronts: reducing expenses, refining supply chains by considering reshoring and onshoring. The individual stated that they are actively collaborating with clients across all these aspects, and indeed, AI plays a role in this ongoing evolution, which ultimately impacts pricing. As well. The growing influence of AI introduces another element of unpredictability, though Walsh noted it's proving highly beneficial for many CEOs. "AI is not just an efficie During the pandemic, company leaders concentrated on novel business strategies, the creation of fresh income sources, and the development of new offerings.
The AI hourglass to come?
Walsh noted the rapid evolution of AI capabilities, admitting that businesses are beginning to reorganize accordingly. CEOs anticipate a predominantly hourglass structure for their companies over the next three years, a pattern observed historically, according to Walsh. W tech implementation. He stated that “nobody can precisely predict the future direction of [workforce shape] … This is a difficult prediction given the swift progress of AI.” Within the survey, 35% indicated that Across certain departments, plans for workforce reductions are being made over the next two to five years, driven by AI advancements. Furthermore, 69% perceive an hourglass shape with increasing numbers. Senior leaders and those just starting out, with fewer in the middle ranks (16% described a vertical triangle, 13% a triangle, and 2% an inverted pyramid).
Managers now have novel duties, such as overseeing teams that incorporate AI agents. Walsh noted that some chief executives report on teams composed of both human personnel and AI agents, "and the managers of these teams are responsible for ensuring [that] the agents finish their assigned steps "Ensuring agents receive quality data inputs is crucial for dependable outputs, and these outputs must be consistently evaluated." CEOs surve Gartner predicts 86% will view AI agents as integral team members by next year, with half believing managers will bear the main responsibility for overseeing these AI counterparts. Employees' results in contrast to other departments like HR or IT.
Walsh concurred with Fortune's findings, emphasizing that "human skills" remain vital as AI integration highlights the need to scrutinize AI-generated results. According to Walsh, human skills are of paramount importance. Despite KPMG's commitment to AI training and providing employees with the necessary tools and software, he emphasized that he consistently reiterates to staff The importance of human connections cannot be overstated, whether within an organization or in external dealings. Trust is of paramount importance now more than ever. Cultivating confidence in our teams, clients, and the outputs of technologies such as AI is paramount. In this era of ambiguity, he noted, trust is at a Exclusive. CEOs anticipate their primary challenge to be retaining and upskilling top-performing employees (75%), with redesigning job functions for AI collaboration ranking second. N (65%) and securing individuals with AI expertise (64%).