AI risk now surpasses economic slowdown for US business leaders

Artificial intelligence has overtaken economic slowdown as the main concern for US business executives, according to research conducted by advisory firm Vistra. The survey of 251 senior decision makers at US mid-market companies found that 50% now regard AI implementation as their chief business risk, ahead of the 48% who cited an economic downturn and the 43% concerned about supply chain disruption.

Data security fears

Among those already using third-party AI systems, 49% identified data security as their most serious risk and 55% said data protection was their biggest compliance issue. One respondent stated, "AI can be really helpful for improving business efficiency and decision-making, but companies need to be careful about data privacy and make sure the technology is used responsibly."

The rise of AI has influenced personal decisions within companies as well. Nearly half (45%) of executives said they would leave their company if it significantly lagged in AI adoption, while 30% admitted that falling behind would affect their long-term loyalty. "AI and digital transformation will define competitiveness; policy clarity and skilled talent are crucial drivers," another respondent said.

Accelerated investment

Market volatility is playing a significant role in speeding up investment decisions. The research revealed that 66% of respondents have accelerated their investment plans due to market uncertainty, with over one-third describing the pace as significant. For 84% of those surveyed, technology and digital transformation are now the primary priorities for business investment.

Organisations report a strong push to integrate AI into business operations. A total of 72% said they use AI for strategic decision-making, while just 1% stated their companies have not yet implemented AI. Cybersecurity threat detection (73%), supply chain risk management (69%), and automated regulatory compliance (67%) were named as the top use cases for AI technologies.

Some 85% of respondents expect AI implementation to be a primary growth driver for their company over the next three years.

Business sentiment

"AI has shifted from being a promising innovation to a defining factor in competitiveness. Despite the mounting compliance and data risks it brings, businesses now see falling behind in AI as a greater threat than an economic slowdown or regulatory change," said Jim Lee, Executive Vice President, Americas, Vistra.

Lee added, "As leaders navigate significant geopolitical uncertainty, AI is becoming a cornerstone of strategic decision-making, reshaping how firms manage risk and regulatory complexity, and identify growth opportunities. What we're witnessing is a paradox of progress, where AI anxiety and ambition are rising together. While companies fear what AI can do if mismanaged, they fear being left behind even more."

"Looking ahead, we are going to see a growing divide between AI leaders and laggards, with talent and investment gravitating to firms that advance fastest," said Lee.

Supply chain reorientation

The survey indicates a shift in global supply chain strategy. Fifty-nine percent of respondents reported redirecting supply chains to Latin America, positioning the region as the top alternative sourcing location to China. Southeast Asia closely follows at 57%, while EMEA is favoured by just 22% of respondents.

Policy and hiring impacts

Regulatory changes including ESG, financial reforms, and new AI rules were highlighted as the leading US policy concern by 28% of respondents, narrowly ahead of tariffs and trade policies at 27%. Uncertainty over these areas is now affecting employment strategies, with 32% saying they have frozen hiring and are actively reducing headcount.

Saul Howerton, Vice President and Global Head of People Advisory at Vistra, commented: "Cross-border flexibility has become vital to competitiveness. Businesses are rethinking their global footprints to not only build supply chain resilience, but often more importantly, tap into new talent and growth markets. The shift towards regions like Latin America highlights a broader push for staff diversification, both as a safeguard and a source of new opportunity. Firms that can shift people, capital, and operations efficiently are best placed to navigate economic volatility and capture long-term growth."