UK CEOs are increasingly using mergers and acquisitions to expand their AI skills base. As executives come under pressure to see returns on AI investment, some see purchasing smaller firms already getting results from the technology as an alternative way to build capacity.
A new poll of UK CEOs shows growing merger and acquisition intent, something which researchers from EY say signals “growing confidence in dealmaking despite ongoing global uncertainty”. The report from EY, which pivoted to market itself as a ‘Transformations’ partner in 2025 – asking prospective clients “Will your business shape the future or be shaped by it?” – suggests this resurgence in M&A may be a way for firms to maintain AI investment indirectly.
UK business leaders are responding to multiple headwinds impacting their organisations. A 54% majority noted said geopolitical tensions, instability and conflict was the first or second priority risk to their business in the next 12 months, followed by 37% noting cybersecurity, 26% citing macroeconomic volatility, and 21% pointing to talent shortages.
In recent years, AI investment has been seen as something of a panacea for all of these risks – with the technology’s supposedly limitless potential positioning businesses for the agility and accuracy needed to continuously adapt their operational models. But with little to show for what has proved to be an expensive period of piloting, many executives are now under increasing scrutiny from shareholders and financial backers.
As a result, there may have been a shift in priorities among business leaders – with 88% now saying that “disciplined growth and a clear path to profitability are more important than rapid market expansion in the current environment.” To that end, 23% of organisations are now adapting their strategies by strengthening financial resilience through cost discipline and capital reallocation, while 19% maintained direct digital and AI investment remained their top priority.
But while new AI projects are symbolically sliding down the corporate agenda, behind “disciplined growth”, that doesn’t tell the whole story. A 74% chunk of CEOs still said their AI investment would grow year-on-year – they just may be reframing it somewhat.
M&AI
Polling more than 100 CEOs in the UK, EY found that 87% said their organisation’s appetite for acquisitions would likely grow in the next 12 months. A 69% portion said they are actively pursuing M&A activity over that period, while a further 63% are also looking at strategic alliances, and 42% are seeking out joint ventures.
And while AI investments might have symbolically fallen down the official CEO agenda, when it comes to the considerations of new M&A activity, the technology is still driving much of the thinking. Enhancing digital and AI capabilities was the top item identified by CEOs as motivating deal activity, just ahead of long-term growth priorities on 45%.
A growing number of studies suggest that only a minority fraction of firms are seeing returns on their AI investment. Most infamously, an MIT study showed only 5% of organisations enjoyed the kind of benefits advertised around the technology – with those being dominated by startups led by young founders, which in some cases saw revenue “jump from zero to $20 million in a year”. And while some might argue the lesson here is that unless you are looking to build a company from scratch, AI has little to offer, others seem to see this as a sign that they should in fact buy up the companies which have made AI investments work for them, in the hope of scaling the ‘magic’ through the rest of their own operations.
Whether that actually works remains to be seen – but in the meantime, UK CEOs are also examining how to adapt their workforce strategies to harness AI. Over the next three years, 43% of leaders said they will be redesigning roles to combine human and AI capabilities, while 42% said they would be investing in large‑scale reskilling and upskilling, and 38% would be increasing hiring for AI, data and digital roles.
Silvia Rindone, EY UK&I managing partner for EY-Parthenon commented, “Despite global turbulence, UK CEOs are approaching M&A with renewed confidence and clear strategic intent, using targeted deals to accelerate technology transformation, strengthen AI capabilities… Alongside continued investment in technology, UK CEOs are increasingly focused on how human skills can be combined with technology to unlock the full value of AI… Organisations that invest early in talent, culture and leadership – while using M&A activity to access technical expertise – will be better placed to drive productivity gains, manage change and sustain long‑term growth in an AI‑enabled economy.”
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