Asia’s CEOs Weigh In: Will AI Spur or Stop M&A?
- By CDOTrends editors
- September 11, 2023
As a cornerstone of innovation, AI promises to redefine how businesses operate. But like any groundbreaking technology, it's not without its challenges and uncertainties.
According to the latest EY CEO Outlook Pulse survey, Asia-Pacific CEOs are keenly aware of AI's transformative power. An impressive 70% of these executives view AI as a business efficiency and innovation catalyst. Moreover, 68% believe that while AI might replace specific jobs, it will also birth new roles and career opportunities.
But this bullish outlook on AI is not without reservations. The threat of cyberattacks, disinformation campaigns, and the emergence of deepfakes have made CEOs wary. A notable 65% emphasize the need for the business community to grapple with the ethical implications of AI. Meanwhile, 66% believe businesses need to do more to manage the unintended consequences that might arise from its deployment.
Despite the caution, the commitment to harness AI's potential remains strong. 89% of CEOs are infusing AI into their capital allocation strategies. This includes 37% actively pouring resources into AI development while 52% planning significant investments in the upcoming year.
Yew-Poh Mak, EY Asia-Pacific strategy and transactions Leader, weighed in on the findings: "CEOs see the huge advantages of AI and its potential to drive productivity and positive outcomes for all stakeholders, spurring interest and investment in AI-driven innovation – they know that bold actions to harness the upside potential will lead to future competitive advantage. CEOs are equally concerned about the unintended consequences of AI and see an opportunity to engage with stakeholders, particularly regulators and customers, on the ethical implications of AI."
Looking ahead, mergers and acquisitions (M&A) appear poised for a resurgence. A record 99% of CEOs anticipate pursuing strategic transactions within the next year, driven by digital transformation and decarbonization themes. Remarkably, 72% of CEOs are weaving AI into their M&A strategies, betting on AI to give them a competitive edge in deal sourcing and processing.
Mak further notes the evolving landscape of M&A: “Despite uncertainty in the macro environment, Asia-Pacific CEOs’ appetite for deals has substantially increased since January 2023. Digitalization and decarbonization are key imperatives for Asia-Pacific CEOs and will be key deal drivers as companies look to accelerate their transformation, increase their competitiveness, and mitigate risks. Traditional means are no longer effective in delivering a competitive edge. AI capabilities, deployed correctly, may be the key to unlocking even more value through M&A.”
Image credit: iStockphoto/jamesteohart