UK CEOs see AI productivity gains but struggle on ROI

UK chief executives are reporting productivity gains from artificial intelligence, but an EY-Parthenon survey suggests many still struggle to measure the financial return on those investments.

Half of the 100 UK CEOs surveyed said AI-enabled tools and applications were among their organisation's top three drivers of productivity gains over the past 12 months. That put AI ahead of business process redesign and simplification, cited by 40%, and workforce reskilling, cited by 38%.

Yet the findings point to a gap between improved output and a clear understanding of value. Only 14% of respondents said they had comprehensive, real-time visibility of AI costs, while 32% reported significant gaps in their ability to assess return on investment.

That tension is also reflected in the barriers companies face when trying to turn productivity improvements into broader business results. More than a third, or 34%, identified legacy technology and operating models as the biggest obstacle, while 29% pointed to organisational complexity, regulation or increased risk management.

Even so, businesses are putting those gains to use. More than two-fifths of respondents, or 44%, said they were reinvesting productivity improvements to support growth, innovation or transformation.

The most commonly cited benefit was greater output without increased headcount or capital, named by 34% of CEOs. Faster delivery followed at 19%, while 15% said AI had freed up more time for higher-value work.

Silvia Rindone, EY-Parthenon UK and Ireland managing partner, said: "The AI conversation has shifted from adoption to impact. UK CEOs now want clear evidence that their investment is delivering stronger productivity and measurable business value.

"We are seeing some encouraging signs of that transition, with AI emerging as a leading contributor to productivity gains and businesses reinvesting those efficiencies to support future growth and transformation. However, productivity alone will not determine the returns. Businesses need the right operating models, processes and skills to turn productivity improvements into sustainable value.

"CEOs must now align capital, technology and talent to convert AI gains into sustainable growth and competitive advantage."

Deals focus

The survey also suggests AI is becoming part of investment and transaction work. More than half of UK CEOs, or 54%, said their organisation was piloting AI in selected transaction-evaluation activities, while 28% said they were using it across multiple activities.

A further 9% said AI had been embedded across most transaction-evaluation activities, making it central to transaction strategy. The data suggests companies are moving beyond operational uses of AI into areas linked to capital allocation and dealmaking.

Transaction activity remains a priority for many respondents. Almost half, or 48%, said they planned to pursue mergers and acquisitions over the next 12 months, while 61% were considering divestments and 59% were exploring strategic alliances.

Matthew Ringelheim, EY UK and Ireland AI & data leader, said: "UK CEOs have a strong appetite for transaction activity over the next 12 months, and AI is playing an increasingly important role in identifying and assessing opportunities, informing decisions and accelerating due diligence. Most UK CEOs are already piloting or using the technology across transaction-evaluation activities.

"However, AI is no substitute for sound transaction fundamentals. Realising value still depends on rigorous analysis, clear strategic choices and disciplined execution. Businesses that combine these fundamentals with AI-enabled insights will be better placed to assess opportunities and make more informed investment decisions."

Skills pressure

The findings also point to growing concern over labour and expertise. Nearly three-quarters of UK CEOs, or 74%, said they expected skills shortages to become a greater barrier to growth than access to capital within the next three years.

That view reflects a wider expectation that AI will reshape work more through changes to roles and required skills than through cuts to headcount. Some 71% of respondents agreed or strongly agreed that AI would have a greater impact on employees' roles, skills and the organisation of work than on workforce size over the same period.

At the same time, almost half of those surveyed, or 47%, agreed or strongly agreed that their organisation was not developing workforce skills quickly enough to keep pace with AI innovation and realise its full value.

The UK sample formed part of a wider global survey of 1,200 CEOs from large companies across 21 countries and five industries. In the UK group, 66% of respondents came from publicly listed companies, 33% from privately held businesses, and 72% represented companies with annual revenue of more than USD $1 billion in the most recent fiscal year.