Enterprises, especially private ones, are gradually moving beyond the initial exploration phase of AI applications and entering a new era—where integrating AI into business operations still carries risks and challenges, but also holds immense potential to drive significant competitive advantage.

Chief Financial Officers (CFOs) increasingly view AI as a strategic advantage rather than merely a cost-cutting tool.

"They are focusing on driving growth and efficiency to help companies accelerate, benefiting both revenue growth and operational performance," said Tarek Ebeid, KPMG US Private Enterprise Leader and Audit Vice Chair.

The stakes for effectively leveraging AI are high, but by applying AI in reporting functions, business leaders have already reaped numerous benefits—from real-time insights into risks to the ability to predict trends and impacts.

However, as CFOs and other business leaders continue to advance their AI initiatives, their focus on perceived challenges and obstacles is also shifting.

Cybersecurity Takes Center Stage

In just one year, several key concerns that US executives once viewed as barriers to AI adoption have significantly eased.

In 2024, in a KPMG study, 31% of US financial reporting leaders cited ethical issues, such as bias or misinformation, as a major barrier to AI adoption—down from 48% in 2023. Slightly over one-third (35%) said that risks from using algorithms without human oversight posed a barrier—down from 51% in 2023. And only 41% viewed keeping up with regulatory changes as a barrier, compared to nearly half (49%) in 2023.

However, several other barriers have risen in prominence among financial reporting leaders—including data security and privacy concerns (56% in 2024, up from 32% in 2023), limited AI skills and talent (46% in 2024, up from 40% in 2023), and collecting relevant and consistent data (44% in 2024, up from 30% in 2023).

In fact, data security and privacy concerns were the top reported barrier to AI adoption among financial reporting leaders in 2024.

"Cybersecurity and data privacy are at the core of every board, CFO, and CEO's focus because companies do not want to make headlines for data breaches," Ebeid said. "When a major AI-related cyber event eventually occurs, depending on its severity, people will step back and ask many questions. But over time, companies will continue to invest in technology, as well as AI governance, security, and risk management. While they cannot eliminate all security incidents, they will be able to elevate risk management controls to a level that protects them as much as possible."

Leaders Differ on AI's Core Value

Companies apply AI in different ways across their businesses, but many have expanded their focus beyond financial use cases to other functions.

"Many initially used AI to complete routine tasks and shorten process times, with much of that work starting in finance," said Francois Chadwick, KPMG US Private Enterprise Global and National Emerging Giants Leader. "Now, we are seeing AI increasingly applied in back-office functions like legal and HR. At the same time, we are also seeing its growing use in sales and marketing functions—and these external-facing areas are where I expect more active applications to emerge."

Despite AI adoption expanding across functions, business leaders remain divided on its core value.

Recent KPMG research shows that 47% of private company and recent IPO executives say AI is leveling the playing field by enabling less innovative companies to quickly catch up and better compete with more innovative ones, while 53% believe AI is more transformative for innovators and disruptors, as early adopters will gain significant competitive advantages.

Need for End-to-End AI Strategy

These business leaders also recognize AI's transformative potential but expect it to materialize gradually.

KPMG research shows that among private company and recent IPO executives, AI is seen as an extremely important technology for driving growth. These executives believe that AI's opportunities and relevance in the medium to long term (over the next 18 months to three years) are higher than in the short term (over the next 18 months).

However, recognizing AI's importance does not always mean having an end-to-end plan for applying AI within that 18-to-36-month window.

"Many companies have not actually taken the time to understand the power AI can bring or to consider it holistically within their end-to-end enterprise strategy," Chadwick said. "They need to do that, while also thinking from a competitive analysis perspective—what competitors might do with AI that could be highly disruptive to them, or how competitors might use AI in back-office or other business areas to get ahead."

Conclusion

In 2025, companies are moving beyond their initial AI exploration phase. They are investing in using AI not only to improve efficiency but also to create more value for the organization by predicting trends and identifying and mitigating new risks emerging from this rapid transformation. Additionally, by strengthening their workforce and security and governance infrastructure to support their investments, companies are better positioned to deliver transformative business impact for those innovating with AI.

For more insights and research on how US business leaders view growth, AI, and reporting, read KPMG's report, "Disruption Decoded."