KPMG’s CEO Outlook survey provides an annual look backstage on the points conserving the highest enterprise leaders up at evening. Yearly, a whole lot of leaders reply the decision from the Large 4 accounting agency to talk frankly and anonymously about key points that have to solved, and 400 participated within the 2025 version. CEOs have a message for America: they only aren’t certain of, effectively, something.
Enterprise leaders advised KPMG—and its lately anointed chair and CEO, Timothy Walsh—that they’re wrestling with uncertainty throughout a number of totally different areas of their work. That is effectively documented and is to be anticipated, Walsh advised Fortune in an interview. “There’s this general, as you would expect, general conversation around business uncertainty,” Walsh stated, including that he was inspired at the least to see the “alignment” when it comes to matters developing in C-suite conversations.
Peeling again the survey knowledge, Walsh revealed that an unsurprisingly sizable majority (89%) say tariffs will “significantly impact” their enterprise’ efficiency and operations over the approaching three years. And practically as many, 86%, stated their agency will enhance costs as wanted. They’re working onerous to get round this, with 85% saying their firm will attempt to shift its sourcing methods to reduce the affect as a lot as potential. The panorama is so unsure that almost each CEO says they should make some type of change: 79% stated they’ve tailored their progress 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 honestly keeps me up at night.”
Cybersecurity’s quantum problem
Cybersecurity dangers stay elevated, particularly as quantum computing approaches. As for advances in quantum computing, Walsh stated it might someday quickly be able to breaking all encryption, and corporations inform him that they’re doing full assessments. It’s a “massive effort” to make sure that they’re not uncovered when that quantum computing functionality arrives, Walsh warned.
Including into the combo the capabilities of AI brokers and, Walsh stated, “in many cases, a nation-state-type investment,” he’s very involved about malware and deepfake-type applied sciences escalating in peril. Over the following three years, 82% of CEOs polled stated cybercrime and cyber insecurity was a high development that would harm their group. Cyber danger was total the second-highest cited strain behind CEOs’ short-term selections. CEOs are most involved about fraud detection and prevention (65%) and identification theft (52%), however additionally they stated they’ve plans in place to mitigate.
All that being stated, Walsh stated CEOs are “feeling optimistic because they see so many growth opportunities.” The financial system has been surprisingly sturdy regardless of all of the uncertainty, the tech sector is driving a really sturdy inventory market, and he even famous some “large deals and transactions” are coming via in the case of M&A. “Capital flows are starting to move and [be] a bit more liquid.”
Tariffs and the AI ingredient
Walsh advised 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 around whether those tariffs will continue to change.” There’s an awesome 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 return. 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 international financial uncertainty (25%).
Walsh emphasised that tariffs are introducing a multi-dimensional problem for CEOs. “The CEOs I speak with are addressing tariff impacts in three areas: cost take-out, supply chain optimization including reshoring, onshoring considerations, and ultimately pricing.” He stated KPMG is actively working with purchasers 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 a number of CEOs: “AI is not just an efficiency play, CEOs are focused on innovating their business models and introducing new revenue streams and products.”
The AI hourglass to return?
Walsh stated AI capabilities are altering shortly, and he acknowledged that corporations are beginning to restructure in response. The survey discovered that CEOs “mostly see an hourglass shape” to their organizations in subsequent three years, Walsh stated, noting that’s typical with each new expertise deployment. He added that “no one knows exactly where [workforce shape] is headed … It’s a challenge to forecast as AI advances rapidly.” Within the survey, 35% stated they’re planning for workforce reductions in some areas over the following two to 5 years because of AI, and 69% see an hourglass with larger 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 pair of% an inverted pyramid).
Managers are going through new obligations, managing groups with built-in AI brokers, for example. Walsh stated some CEOs describe groups with each folks and AI brokers on them, “and managers of those teams have to ensure [that] agents complete steps in the workflow process, that agents have good data inputs so that their outputs can be relied upon, and continuously review those outputs.” CEOs surveyed stated 86% of them see AI brokers changing into embedded group members subsequent 12 months, and half suppose managers will likely be primarily answerable for managing AI brokers’ efficiency versus, say, HR or IT.
Walsh agreed with Fortune‘s reporting that “human skills” nonetheless matter as AI implementation reveals the need of reviewing AI outputs. “Human skills are critically important,” 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 critical … both internally and externally. Trust is more important than ever. Building trust with our teams, clients and ensuring we can trust outputs of technology 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 mirror AI collaboration (65%) and hiring AI-capable expertise (64%).
Fortune International Discussion board returns Oct. 26–27, 2025 in Riyadh. CEOs and international leaders will collect for a dynamic, invitation-only occasion shaping the way forward for enterprise. Apply for an invite.
