UK chief executives are increasingly using mergers and acquisitions to strengthen artificial intelligence capabilities and accelerate long-term growth strategies, according to the latest EY-Parthenon CEO Outlook survey.

The research, which included responses from 100 UK business leaders, found that 87 per cent expect their appetite for dealmaking to increase over the next 12 months, reflecting growing confidence in transactions as a tool for transformation rather than simply expansion.

More than two-thirds of UK CEOs said they are actively pursuing acquisitions, while many are also exploring strategic alliances and joint ventures as they seek access to technology, expertise and new growth opportunities.

The findings suggest a shift in how companies approach M&A activity. Rather than prioritising scale alone, business leaders are increasingly focused on targeted, value-led deals aimed at strengthening AI and digital capabilities. Enhancing technology infrastructure and supporting long-term strategic growth emerged as the leading considerations when evaluating transactions.

The UK remains a central focus for investment activity. Respondents identified the domestic market as their top growth priority, ahead of the United States, Germany, France and India. Globally, the UK also ranked among the leading destinations for planned M&A activity.

Silvia Rindone said companies were using transactions to accelerate technology transformation and position themselves for the next phase of growth. She added that the UK’s regulatory environment and sector strengths continued to make it attractive to investors.

The survey also highlighted a broader sense of resilience among UK business leaders despite geopolitical instability and economic uncertainty. Nearly nine in ten CEOs said they remained confident about the year ahead, while a large majority expressed optimism about profitability and investment in emerging technologies.

At the same time, executives acknowledged mounting external risks. Geopolitical tensions ranked as the most significant concern over the coming year, followed by cybersecurity threats, macroeconomic volatility and talent shortages.

AI investment is emerging as a key strategic response. Almost three-quarters of UK CEOs said they planned to increase spending on AI compared with last year, signalling a move from experimentation towards enterprise-wide deployment.

Business leaders reported that AI was already having a measurable impact on areas including strategic decision-making and customer experience. Many are also reshaping workforce strategies to integrate human and AI capabilities more closely, with increased focus on reskilling, role redesign and hiring for specialist digital and data positions.

Rindone said the challenge now extended beyond technology adoption to organisational transformation. Companies that combine investment in AI with changes to talent, culture and operating models, she argued, would be best placed to sustain growth in an increasingly AI-driven economy.