Australian executives are past the worry stage. KPMG’s survey reveals leaders are now focused on embedding AI into strategy and moving from concern to concrete action.
What’s Happening: Australian business leaders have moved past speculation and into execution mode on artificial intelligence. While 63 percent rank AI as their top concern, this anxiety is driving action, not paralysis.
Why This Matters: When leaders recognise a challenge as urgent, they act. The shift from inflation concerns to AI concerns signals executives understand this is the defining strategic moment for their organisations.
Australian business leaders have moved past the anxiety phase. While KPMG Australia’s latest survey shows 63 percent of C-Suite executives rank artificial intelligence as their top concern for 2026, the real story is not the worry. It is what that worry is driving them to do.
The shift from inflation anxiety in 2025 to AI anxiety in 2026 tells a deeper story. Executives have stopped debating whether AI matters. They have started asking how to embed it into their organisations before competitors do.
“Australian businesses are now more aware than ever of the challenges and opportunities of new technologies,” said Andrew Yates, KPMG Australia CEO. “It’s significant that leaders ranked AI-related issues as their top concern for the first time, not just for 2026, but for the next 3-5 years. This is clear recognition that AI is here for the long haul and businesses that get ahead of the game and embed it into their overall strategy now will be well ahead of those that don’t.”
That last statement is crucial. Yates is not describing anxiety. He is describing competitive urgency. Leaders understand the window is closing. The companies that embed AI into strategy now will have a generation-long advantage over those that hesitate.
The KPMG survey, which received 274 responses from C-Suite executives and board members across public and private sectors between October and November 2025, captures this pivotal moment. Sixty-one percent rank new technologies and AI as their dominant concern for the next three to five years. But that is not weakness. That is clarity. And clarity drives action.
Leaders recognising the moment is now
The anxiety around AI implementation is legitimate. Digital transformation and optimisation ranked second at 54 percent. Cyber security risks ranked third at 42 percent. Regulatory uncertainty ranked fourth at 37 percent. These are real obstacles.
But here is what the data reveals: executives are not avoiding these obstacles. They are naming them, prioritising them and moving through them.
The concentration of AI and technology concerns at the top three positions of the challenge list actually signals something positive. It means executives have stopped treating AI as a nice-to-have or a future problem. It is their problem right now. That forces focus.
Consider the alternative scenario: if executives were not concerned, they would be dismissing AI as hype. Instead, they are taking it seriously enough to rank it above cost control, above geopolitical tensions, above inflation. That is not anxiety paralysis. That is strategic priority.
Dr Brendan Rynne, KPMG Australia Chief Economist, noted that executives identified productivity growth as a key challenge, with over a third ranking it as critical for 2026. This matters because executives see AI as the lever to solve the productivity problem that has plagued Australian business for years.
“We’ve been witnessing sliding productivity for several years now,” Rynne said. “Seeing the weight put on this challenge by our respondents only reinforces the legitimacy of this issue in 2026.”
Smart executives understand that AI is not a distraction from productivity improvement. It is the tool to unlock it. The concern drives investment.
What momentum actually looks like
The survey reveals interesting splits between company sizes and priorities. Cost control ranked fifth for larger corporates but ninth for mid-market companies. This suggests mid-market leaders are less defensive and more growth-focused. They are seeing opportunity where larger companies see risk.
That difference matters. It suggests executives are reading the landscape differently. Some are hunkering down. Others are moving forward.
The broader pattern is clear: executives have moved from the question of whether to engage with AI to the question of how to compete in an AI-driven market. Consumer confidence dropped to the third-lowest concern on the list, the largest fall in the challenge rankings. Concerns about capturing new markets fell by around a third compared to 2025.
Why? Because executives are more optimistic about capturing opportunities from a rising market. They are less concerned about supply chains and geopolitical tension. They are focused inward on execution.
This is the signature of leaders who have made a decision. The debate is over. The work begins. Yates emphasised the long-term commitment required: “Businesses that get ahead of the game and embed it into their overall strategy now will be well ahead of those that don’t.”
That is not a warning. That is a call to action. And Australian executives are hearing it.
For the first time, the social impact of new and disruptive technologies including AI topped executives’ list of societal concerns at 59 percent, ahead of housing affordability and skills gaps. This suggests leaders recognise AI’s potential to reshape society and their responsibility in how they deploy it.
That is maturity. That is not anxiety about technology. That is accountability for deploying technology well. The companies that move fastest on AI implementation over the next twelve months will set the tempo for their industries. The executives surveyed understand this. The anxiety is real. But so is the momentum.
The year of AI debate has ended. The year of AI execution has begun. Australian executives are not worried about missing the moment. They are focused on leading it.
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