In a recent KPMG study, CFOs and financial leaders reveal that the integration of AI within their businesses is rapidly becoming the norm, driven by substantial investments and a broadening scope of applications. Currently, 86 percent of companies are either testing or actively using AI, with nearly all expected to implement AI services within the next three years.

The report indicates that investment in AI is also seeing a significant uptrend, now comprising 10 percent of IT budgets for many companies. Projections indicate a 25 percent increase in AI investments over the next year, with over half of the companies planning to boost their AI spending by 25 to 99 percent over the next three years.

Notably revenue generation has overtaken productivity as the primary measure of AI’s return on investment, underscoring a shift in focus among corporate leaders.

Why it matters: Understanding the expanding role of AI in business is crucial for staying competitive. Companies must strategically plan, govern, and invest in AI to fully leverage its potential, ensuring sustainable growth and innovation. A shift towards AI-driven revenue generation highlights the evolving expectations and strategic priorities of CFOs and corporate leaders.

• Widespread AI Adoption: Currently, 86 percent of businesses are testing or using AI, with 99 percent expected to adopt AI services within three years. This widespread adoption signifies a significant shift towards AI-driven business models.

• Investment Growth: AI investment now represents 10 percent of the IT budget for many companies. Over the next year, AI investment is projected to increase by 25 percent on average, with more than half of the companies planning significant budget hikes over the next three years.

• Sector-Specific Spending: Technology, telecoms, manufacturing, and financial services sectors are leading in AI spending, averaging around 10 percent of their budgets. Healthcare and life sciences sectors are notable, with leaders spending 13 percent of their IT budgets on AI.

• Geographical Trends: North American companies currently lead in AI spending, but ASPAC and European firms plan to increase their AI budgets by 42 percent more than their North American counterparts over the next three years, driven by regulatory frameworks like the EU’s Artificial Intelligence Act.

• AI in Financial Reporting: AI is revolutionizing financial reporting and auditing by enabling smarter information flows, better risk identification, and enhanced anomaly detection. In the U.S., companies are at the forefront of integrating AI into financial reporting processes. The use of AI in these areas is set to rise dramatically, with generative AI (genAI) expected to play a significant role. Currently, 15 percent of U.S. companies have adopted genAI for financial reporting, and this figure is anticipated to grow significantly as the technology evolves.

Go Deeper -> AI in financial reporting and audit: Navigating the new era – KPMG