Is ROI on AI Investment the CEO's Biggest Challenge?

Global CEOs are grappling with several key challenges that are impacting both their confidence to deliver successful returns and the long-term strategies of their businesses. 

According to PwC’s newly released Global CEO Survey, presented at the World Economic Forum’s Annual Meeting in Davos, chief executives are reporting their lowest level of revenue confidence in five years.

It finds that factors including rising geopolitical risk, intensifying cyber threats and rapid technological change mean that many businesses have yet to translate investment into consistent financial gains. 

PwC surveyed more than 4,000 chief executives across 95 countries and territories. 

They revealed that, while challenges persist, they are seeking to mitigate them by focusing on multiyear opportunities, prioritising innovation and new sectors, and forging ahead with investment in AI. 

According to Mohamed Kande, PwC Global Chairman: "2026 is shaping up as a decisive year for AI.

"A small group of companies are already turning AI into measurable financial returns, whilst many others are still struggling to move beyond pilots. That gap is starting to show up in confidence and competitiveness, and it will widen quickly for those that don't act."

Tackling the AI divide

PwC reveals a growing divide between those companies successfully deploying AI and those still struggling to move beyond pilot programmes. 

Only 12% of CEOs report that AI has delivered both cost savings and revenue benefits over the past year.

This relatively small cohort is pulling ahead of others by establishing strong AI foundations and deploying the technology across their entire business.

In doing so, PwC says they are two to three times more likely to have embedded AI extensively across products, services, demand generation and strategic decision-making.

The majority of CEOs surveyed report a different reality. Over half (56%) have seen neither revenue gains nor cost benefits from AI investments, whilst 30% report increased revenue and 26% have seen costs decrease. 

Sachin Agrawal, Managing Director for Zoho UK says: “The decline in CEO revenue confidence highlights the scale of change businesses are navigating, from geopolitical uncertainty to rapid technological transformation. 

“Strong digital health and end-to-end digital transformation are now critical for building resilience and positioning organisations to weather the ongoing polycrisis.

"AI is already delivering meaningful value for companies embedding it into core operations, but its success depends on robust data management. High-quality, well-governed data ensures that advanced technologies like AI operate securely, responsibly and at scale."

According to PwC, companies applying AI extensively to products, services and customer experiences achieved nearly four percentage points higher profit margins than those that did not.

For CEOs, the question of whether they are transforming fast enough to keep pace with AI ranks as their top concern, cited by 42% of respondents.

Why business reinvention matters

To mitigate many of the perennial challenges businesses face, CEOs are employing different strategies. For example, 42% of leaders say their company has begun competing in new sectors over the past five years. 

Among those planning major acquisitions in the next three years, a similar proportion (44%) expect to pursue deals outside their existing industry.

PwC says that companies generating higher percentages of revenue from new sectors report larger profit margins and their CEOs express greater confidence in growth prospects.

Innovation driving strategy

Half of all CEOs say innovation is central to their company's business strategy, yet execution gaps remain. 

Only one in four agree that their organisation tolerates high-risk innovation projects, has disciplined processes to stop underperforming initiatives or operates a defined innovation centre.

Fewer than one in 10 CEOs (8%) say their company has implemented at least five of six innovation-friendly practices to a large extent. 

Yet PwC's survey data shows that companies employing these practices achieve higher percentages of sales from new products, faster overall revenue growth and higher profit margins.

Navigating the future

PwC demonstrates a clear lesson: companies that are moving fastest to reinvent their business and operating models are outpacing those moving more slowly. 

With AI adoption showing no sign of decreasing, those achieving both cost savings and revenue gains from AI have built stronger foundations and deployed the technology more extensively. 

Kenny MacAulay, CEO, Acting Office, a software platform for accounting practices says: "As businesses grapple with increasingly challenging trading conditions, it's crystal clear that AI and tech investment is now a make-or-break investment for companies seeking to initiate growth.

"It's not just an issue of increasing revenue and reducing overheads, it's about having the digital systems in place to optimise customer communications, compliance and digital invoicing to improve the performance of the business from top to bottom. Those that recognise the need for digital change will thrive, those who fail to read with warning signs may struggle to survive."

Looking ahead at the wider business context, Mohamed says: "In periods of rapid change, the instinct to slow down is understandable, but it's also risky. The value at stake across the global economy is increasing, and the window to capture it is narrowing. 

“The companies that succeed will be those willing to make bold decisions and invest with conviction in the capabilities that matter most."