UK CEOs have a growing appetite for dealmaking and are increasingly looking to M&A to help strengthen their AI capabilities. However, amid mounting pressure to generate returns on AI investments, some are modifying their investment priorities and acquisition strategies.
A new poll from EY has demonstrated increased M&A intent among UK CEOs, which researchers say shows “growing confidence in dealmaking despite ongoing global uncertainty”.
The report polled more than 100 UK CEOs and found that 87 per cent expect their M&A appetite to increase over the next 12 months, with 69 per cent saying they would actively pursue M&A, 63 per cent considering strategic alliance and 42 per cent seeking joint ventures.
In the report, UK CEOs responded to the headwinds that were currently shaping their businesses. 54 per cent cited geopolitical tensions, instability and conflict as the first or second priority risk over the next 12 months, followed by cybersecurity (37 per cent), macroeconomic volatility (26 per cent) and talent shortages (21 per cent).
While a huge amount of investment has been directed towards AI in recent years, limited returns on this expenditure have seemingly put executives under growing scrutiny, leading to a shift in priorities among some CEOs.
88 per cent of respondents now say that “disciplined growth and a clear path to profitability” are more important than securing rapid market expansion. Reflecting this, 23 per cent now say they are modifying their strategies and targeting improved financial resilience via cost discipline and capital reallocation. 19 per cent, meanwhile, continue to focus on direct investment in digital and AI as their main priority.
Despite the modification of investment priorities and the growing focus on more disciplined growth, however, the majority of CEOs (74 per cent) still say that their investments in AI will continue to grow year-on-year.
Amid this more considered approach, AI remains a key priority for those targeting M&A activity. According to the survey, enhancing digital and AI capabilities was cited as the top driver of deal activity among CEOs (45 per cent), making it the most popular factor, ahead of long-term growth priorities.
While recent surveys have suggested that only a minority of companies (mainly young founder-led startups) are seeing returns on investments in AI, this seems to have prompted some buyers to target businesses that have yielded results from their AI investments.
UK CEOs are also considering ways of adapting in order to more effectively harness AI, with 43 per cent saying they will look to redesign roles over the next three years in order to combine AI and human capabilities. 42 per cent, meanwhile, plan to invest in large-scale reskilling and upskilling of their workforce and 38 per cent are planning to increase hiring for AI, data and digital-related positions.
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 and build long-term value.”
“As activity gathers pace, the UK continues to stand out as a priority for growth, supported by a clear and efficient regulatory environment and strong sector appeal across consumer, energy, life sciences, defence and wealth management. This momentum reinforces the UK’s position as a leading global destination for capital, placing M&A at the heart of the next phase of business growth.”
Rindone added that organisations that use M&A activity to access technical expertise, while combining this with early investments in “talent, culture and leadership”, will be “better placed to drive productivity gains, manage change and sustain long-term growth in an AI-enabled economy.”
Demand for AI and digital infrastructure drove an increase in UK M&A deal values during 2025
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