In the two years since large language models went mainstream, enterprise investments in technologies to drive AI adoption have risen dramatically. By 2027, IDC forecasts worldwide digital transformation investments will reach $4 trillion. By the end of this year, organizations within the United States are expected to surpass $1 trillion in digital transformation spending.
Much of that spending will be on AI integration, cybersecurity, IT infrastructure updates and workforce upskilling. With that in mind, here are the most significant trends CxOs need to know for 2025.
AI will become increasingly central to business strategy and operations.
Global AI investment surged to $142.3 billion in 2023 and is projected to reach $200 billion by the end of 2025. This substantial influx of capital has accelerated AI’s integration into core business processes, moving beyond experimental phases to deliver tangible results.
The shift toward AI-led processes is starting to reveal measurable advantages. According to recent Accenture research, the number of companies with fully modernized, AI-led processes has nearly doubled from 9% in 2023 to 16% in 2024. These AI-mature organizations reportedly outperform their peers, achieving 2.5 times higher revenue growth and 2.4 times greater productivity.
Such compelling outcomes prompt CIOs to transition from AI experimentation to a more strategic, enterprise-wide implementation.
Daniel Clydesdale-Cotter, CIO at Echostor, says AI is now central to business strategy and is becoming, if it’s not already, as crucial as the core business itself to success. “Shortly, AI will become as important as one’s main line of business. It’s the first thing a CxO looks at now outside the actual product or service being sold,” says Clydesdale-Cotter.
Data management and governance are more critical than ever.
CIOs must ensure their organizations have clean, accessible data to power AI initiatives and drive business value. Clydesdale-Cotter emphasizes the importance of data in the context of AI and machine learning initiatives. “Organizations are looking at how they can get their data, if it isn’t already, into the right place to make the best use of AI. They’re tackling the challenges regarding where their data lives, what data they need to use, and getting their data in the right formats,” he says.
“If you can’t access the data, or the data is not clean, and you don’t get the results you want, your AI proof of concepts will fail pretty quickly,” Clydesdale-Cotter says.
A survey conducted by Data and AI Leadership Exchange with DataIQ forecasts the data governance market will reach $23 billion by 2033, an annual growth rate of 21% from this year.
Cybersecurity will remain a top priority.
The increased reliance on data to care for and feed AI models, coupled with continued investments in business transformation, means cybersecurity will remain a top concern and will require CISOs to work more closely with CIOs and chief digital officers to help manage cross-business risk prioritization and mitigation.
The new SEC cybersecurity rules have also increased board-level cybersecurity oversight and CISO accountability, calling for closer alignment between cybersecurity leadership and top executives. Studies indicate that approximately 20% of CISOs now report directly to their organization’s chief executive, up from 14% in 2023. This trend is expected to continue as companies adapt to the evolving threats to data.
The workforce will continue to transform.
AI and automation will accelerate how job roles change. CxOs must focus on upskilling employees and managing some of the significant changes in integrating AI into various business functions. Some experts, such as Deborah Perry Piscione, co-founder and CEO at the Work3 Institute and co-author of the book Employment Is Dead, How Disruptive Technologies Are Revolutionizing The Way We Work, believe we are heading to substantial changes in how we work.
Recent data shows that 69% of COs intend to upskill or reskill current employees in 2024, up from 47% in 2023. These programs often include partnerships with academic institutions, AI-driven personalized learning paths, and opportunities for employees to work on innovative projects.
Piscione says companies will need to focus more on upskilling their current workers and figuring out how to make the right jobs available for the right people. “We’re going to move to a project-based model of work. It’s a hyper gig economy that will come into play,” Piscione says.
The talent shortage in tech will persist.
With the scarcity of technical talent, those CxOs that develop creative strategies to develop skilled, technically-savvy staff will better develop and retain skilled professionals.
Some of the skills in most demand include AI/ML, cybersecurity, data analytics and cloud computing. According to the research firm IDC, more than 90% of organizations will be affected this year by the IT skills shortage, potentially leading to $6.5 trillion in losses due to delayed product releases, customer satisfaction, business loss and overall quality issues.
CxOs will explore external resources and strategic partnerships to address the talent gap. This includes collaborating with technology partners with proven AI expertise, outsourcing for specialized skills or short-term needs, and working with recruitment agencies. A growing approach is leveraging AI to streamline talent acquisition and management. Organizations are implementing AI tools for predictive analytics to forecast future hiring demands, automate high-volume tasks like resume screening and create personalized employee development plans.
Cloud adoption and optimization will accelerate.
With a focus on multi-cloud and hybrid cloud strategies to enhance flexibility and reduce costs, cloud adoption and optimization are set to accelerate dramatically, driven by the increasing need for flexibility, cost reduction and operational efficiency. Organizations are expected to embrace more sophisticated multi-cloud and hybrid cloud strategies, with 89% already utilizing a multi-cloud approach, according to Flexera’s 2024 State of the Cloud Report.
This shift allows businesses to optimize costs by leveraging different providers for various services, maintain control over sensitive data in private clouds, and achieve greater redundancy to minimize downtime. Integrating AI-powered cloud management tools will be crucial in this optimization, offering real-time insights, predictive analytics and automated actions to reduce unnecessary expenditures and improve resource allocation.
Cost reduction will remain a primary focus, with businesses leveraging advanced automation and AI to streamline cloud operations. By 2025, AI-driven tools are projected to dominate cost optimization efforts, providing real-time monitoring, predictive analytics for future cloud spending, and automated rightsizing of resources. Companies with fully modernized, AI-led processes outperform their peers, achieving 2.5 times higher revenue growth and 2.4 times greater productivity. Additionally, the adoption of serverless computing is expected to grow at a compound annual growth rate of 23.17% from 2023 to 2028, offering businesses a more cost-effective and scalable solution for managing their cloud infrastructure.
These advancements will enable organizations to significantly reduce cloud expenditures while maintaining high performance and agility in an increasingly competitive digital landscape.
Digital transformation initiatives will expand beyond technology implementation.
Digital transformation initiatives are evolving beyond technological upgrades to focus on fundamental business model innovation. This shift is driven by the realization that true transformation requires rethinking entire value propositions and how companies engage with customers. CEOs are increasingly recognizing the opportunity to move from technology-led digital transformation to executive-led business reformation, with a focus on boosting profits and creating new revenue streams.
The emphasis on business model innovation reshapes how companies operate and deliver value. Organizations are exploring ways to leverage AI and other emerging technologies to transform systems of record into systems of action, connecting various parts of the business and reimagining work processes. This approach goes beyond optimizing existing tasks to creating new outcomes and value propositions. Companies also invest in “everyday AI” to enhance productivity, supercharge work and empower employees to focus on more value-added activities. Organizations aim to build and hone their competitiveness in an increasingly digital marketplace by fostering innovation and exploring AI-powered business models.
Finally, 2025 will likely prove to be a pivotal year in business transformation, with those organizations that attained success in their AI implementations distancing themselves further from those organizations that have yet to put AI technologies to practical use.
