Seeking a state of calm in the current trade storm is clearly challenging the minds of corporate strategists around the globe today, but one thing remaining constant is the focus and optimism over AI and digital capabilities.
Amid uncertainty, digital transformation remains a critical driver for business and deal strategies, with AI capabilities increasingly driving corporate acquisitions. At the same time, a shift to defensive consolidation helps companies build operational and competitive resilience.
The EY-Parthenon CEO Outlook Survey revealed unprecedented optimism in the transformative power of technology, particularly AI, from Asia-Pacific’s CEOs. In fact, 85 per cent predict that AI will be a decisive factor in establishing industry leadership in 2025. An even higher number, 87 per cent of leaders, believe that the accelerated adoption of AI and the associated up-skilling of their workforce will be crucial differentiators in the coming years.
The latest EY research on GenAI shows 90 per cent of firms surveyed have adopted AI into operations to some degree, but most remain in the early stages, and eight per cent have not integrated AI at all. 72 per cent of surveyed leaders plan to increase annual investment related to GenAI specifically, and the rush to AI challenges business leaders to seek both optimisation of adoption strategies and acquisition as a means to accelerate capabilities.
M&A outlook in flux but opportunities remain
The prevailing optimism around AI and technology coincided with an early surge in expectations in M&A deals at the start of the year. Nearly half of the CEOs surveyed (42 per cent) expressed strong confidence in investing in Capex and R&D, as they focus on leveraging technological advancements such as AI to secure competitive advantages.
Many CEOs identified M&A as a transformation accelerant in 2025, with confidence by Asia-Pacific CEOs (61 per cent) driving an even greater appetite for deals versus European and American peers.
Also Read: When the chain snaps: How tariffs are unraveling Southeast Asia’s SMEs
In response to significant trade and market disruption, a portfolio realignment is essential to counter geopolitical risk and shifting market growth potential. Trade policy and supply chain risks will now govern many investment decisions.
CEOs need to navigate this landscape adeptly to fully harness the value of any planned transactions while integrating technology investments that reshape growth strategies.
Pockets of opportunity remain, such as in Southeast Asia. Despite risks from recent tariff announcements out of Washington, the region could see increased investment and partnerships as governments and businesses seek growth opportunities in the volatile landscape.
Businesses anticipate greater investments through joint ventures, partial ownership, and minority interests in Asian companies. This reflects their need to balance uncertainty in countries like China, Canada, Mexico, and the EU that face added complexity given implications of tariff announcements and growing trade challenges. Strategic partnerships will help businesses navigate risks and drive growth.
There are clear opportunities in markets and regions of growing domestic demand to “build” domestic supply chain ecosystems to avoid tariff risks. The major obstacle in this path is that this strategy hinges on more than procuring and manufacturing locally, but also whether the destination of finished goods can be locally contained.
Also Read: Asia’s trade turning point: How tariffs and geopolitics are redrawing supply chains
More mature markets, like Japan and Korea, face the complex challenge of consolidating and restructuring their companies’ supply chains, which have expanded globally both upstream (e.g., raw materials and production) and downstream (e.g., distribution and sales). In a tough economic climate, achieving cost efficiencies through these efforts becomes increasingly attractive.
Seeking a state of hyper-agility and resilience
Companies will view current critical trends and disruptions as either threats to their existence or opportunities. It is this difference that separates industry leaders from laggards. Today’s business landscape is shaped by disruptive forces: rapid technological advancements, including artificial intelligence (AI), climate change-driven sustainability agendas, and geopolitical tensions affecting supply chains and global operations.
Digital ecosystems expose new threats and opportunities, while remote work reshapes organisations. Rising cybersecurity risks, shifting consumer expectations, economic volatility and complex regulations demand agility. Meanwhile, emerging markets create new competitive dynamics and growth potential.
In terms of deal strategy, while uncertainty clouds the immediate future, M&A should still be leveraged as a transformation catalyst. CEOs should look to M&A, particularly in distressed times as an opportunity for accelerated transformation. Target deals will include those that align with long-term goals, such as adopting new technologies, entering new markets or strengthening competitive positioning through strategic consolidation.
CEOs clearly need to sharpen their focus on the interplay of macroeconomic, geopolitical, regulatory and technological forces. Proactively addressing these risks enables growth opportunities and helps mitigate disruption. The traditional business dashboard must factor in more diverse sources of insight and more outlier views than in the past. New indicators must be established to build a wider view of possible scenarios so that a path to operational resilience can be found.
The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organisation or its member firms.
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