Artificial intelligence has become one of the main engines of transformation in the technology, media and telecommunications (TMT) sector. Eighty percent of CEOs in the industry are confident about their organizations’ growth prospects, while 83% are optimistic about the future of the sector as a whole. At the same time, nearly three-quarters of leaders have adjusted their strategies to changing regulatory and geopolitical conditions. According to the report KPMG CEO Outlook 2025. Technology & Telecommunications, based on a survey of 230 chief executives from technology and telecommunications companies, AI is an investment priority for 71% of leaders, with 67% planning to allocate 10–20% of their budget to artificial intelligence over the next 12 months.
Companies in the technology and telecommunications sector are preparing for growth by focusing on artificial intelligence, innovation in business models, and strategic mergers and acquisitions. Eighty percent of CEOs are confident in their companies’ prospects, and 83% believe the sector as a whole will continue to grow. Financial expectations are also improving, with 40% of leaders anticipating strong profit growth. Agentic AI is expected to play a key role in this process by boosting efficiency and opening up new revenue streams. As a result, companies are increasingly considering mergers and acquisitions, primarily to gain access to AI capabilities and infrastructure.
At the same time, artificial intelligence remains an investment priority for 71% of respondents, and 67% plan to devote 10–20% of their budget to AI over the next 12 months. Ethical concerns remain the biggest challenge, ranking ahead of barriers related to data, regulation, or costs. In parallel, the sector continues to advance its ESG agenda. For 62% of companies, sustainability is already an integral part of the business model, while AI can help improve resource efficiency, enhance the quality of data and reporting processes, and support climate risk modeling.
When asked about the key operational priorities supporting growth, executives in the technology sector pointed most often to transforming business and operating models to make them more innovative (18%), as well as understanding and implementing generative and agentic AI (18%). By contrast, CEOs of telecommunications companies most frequently identified digitization and the expansion of connectivity as their top priority (26%). These responses reflect the need to modernize infrastructure to support “as-a-service” models such as AI-as-a-service and cloud-as-a-service, as well as the continued rollout of 5G networks.
At the same time, as many as 59% of respondents identified data readiness as one of the main challenges. Organizations continue to struggle with access to reliable and properly structured data collected from multiple sources. Data silos make it difficult, among other things, to build a consistent customer profile across marketing, sales, and after-sales service. As a result, companies face missed cross-selling and upselling opportunities, higher customer churn, and delays in fulfilling orders. In addition, some organizations, instead of pursuing a coherent transformation program, are running multiple scattered and uncoordinated AI pilots across different business units. This approach is not only unproductive, but can also generate higher costs and weaken confidence in achieving the expected return on AI investments, ultimately slowing the pace of innovation, says Rafał Szafraniec, Partner and Head of Technology, Media and Telecommunications Advisory at KPMG in Poland.
Artificial intelligence is one of the key investment priorities for management teams in the technology and telecommunications sector, cited by 75% of respondents from technology companies and 66% from telecommunications firms. KPMG’s research shows that CEOs of technology companies generally pursue a more clearly defined and strategically structured vision for AI investment, while leaders of telecommunications companies are more likely to give individual business units greater autonomy in experimenting with AI-based solutions, supporting a decentralized adoption model.
As many as 84% of CEOs expect a positive return on investment in AI within three years, while 22% expect to achieve positive ROI within one year or less. The most frequently cited benefits include improved data analytics and decision-making, the development of new products and services generating additional revenue streams, and increased innovation across the organization.
Key challenges for the sector: regulation, cybersecurity and ESG
Technology and telecommunications companies are facing growing regulatory, operational and environmental challenges. They are monitoring regulatory changes that could affect global supply chains, which — amid constraints in access to network equipment, semiconductors, and components — must remain flexible and resilient to geopolitical risks.
Cybersecurity is one of the most important factors shaping short-term business decisions. In response to rising threats, CEOs say they are increasing spending on cybersecurity (51%), focusing primarily on strengthening data protection and identity and access management, developing security-as-a-service models based on end-to-end encryption, and ensuring regulatory compliance.
At the same time, 68% of leaders believe their organizations will achieve climate neutrality by 2030, although major challenges remain, including skills shortages, the decarbonization of supply chains, and the need to demonstrate the business value of ESG investments.
About the report
The report is part of the eleventh edition of the global KPMG CEO Outlook survey, conducted among 1,350 chief executives from 11 key markets between August 5 and September 10, 2025. This publication focuses exclusively on surveyed CEOs from TMT companies — 120 from technology firms and 110 from telecommunications firms — while also including comparisons between these subsectors where relevant. All respondents lead companies with annual revenues exceeding USD 500 million.
