AI Fears Overtake Economic Worries As Today’s Biggest Business Risk

Artificial intelligence has shifted from an emerging technology to a defining force in global business. And now, it sits at the centre of a growing sense of unease.

A new survey from Vistra reveals a striking reversal in business priorities – executives are more worried about AI than they are about the economy itself.

Yes, you heard that correctly. There is actually something more worrying than the economy, and perhaps that’s the most frightening thing of all.

For years, economic slowdown, inflation and supply chain instability have dominated corporate risk registers. But today, the biggest perceived threat is not the market, but the machines reshaping it.

This pivot speaks to a broader change in corporate mindset. AI is no longer seen simply as a tool to streamline operations or unlock competitive advantage. Now, it’s becoming viewed as a disruptive force that carries significant compliance, security and strategic risks.

Leaders recognise its transformative potential, but they’re still deeply concerned about the consequences of adopting it too slowly – or, in the same breath, too carelessly. This tension between ambition and anxiety is driving a new era of accelerated investment, cautious experimentation and heightened internal debate over how to implement AI responsibly.

Against a backdrop of geopolitical instability, regulatory pressure and a rapidly evolving digital landscape, businesses are confronting a paradox: embracing AI has become essential for survival, even as its risks grow more complex and consequential. Vistra’s latest findings capture this moment of transition – one where technological progress is moving faster than the guardrails designed to govern it.

AI Anxiety Takes the Lead

For the first time, AI implementation has emerged as the number one business risk, with half of executives surveyed ranking it above traditional threats like economic slowdown (48%) and supply chain disruption (43%). This shift is driven not by fear of innovation itself but by the complexity of adopting new technologies while protecting sensitive data. It’s a tight rope, no doubt about it.

Among companies already using third-party AI systems, nearly half (49%) identified data security as their most urgent risk. A further 55% cited data protection as their biggest compliance challenge. As one respondent succinctly put it, AI can greatly improve business efficiency and decision-making, “but companies need to be careful about data privacy and make sure the technology is used responsibly.”

In other words, businesses aren’t afraid of AI’s potential – they’re afraid of mismanaging it.

Innovation Accelerates Despite Uncertainty

Paradoxically, these concerns are not slowing down investment. In fact, they’re speeding it up. Market volatility is driving 66% of leaders to accelerate AI-related decisions, with over a third describing that acceleration as “significant”. For 84% of respondents, technology and digital transformation now top the investment agenda.

This rapid pace reflects a new reality – falling behind in AI adoption is seen as a greater threat than adopting it too quickly. Executives are increasingly aware that competitive advantage hinges on digital maturity, particularly in markets facing geopolitical instability and regulatory complexity.

Jim Lee, Executive Vice President, Americas at Vistra, explains this tension as a “paradox of progress”. While businesses fear AI’s risks, “they fear being left behind even more.” AI is no longer an optional upgrade; it is becoming the backbone of strategic decision-making.

The Talent Stakes Are Rising

Technological competitiveness is no longer just a corporate priority – it’s impacting workforce retention too. Nearly half (45%) of executives say they would leave their company if it lags significantly behind in AI adoption, with a further 30% admitting it would influence their long-term loyalty.

This suggests that AI is shaping the labour market as much as it is shaping business strategy. The companies that invest in AI, and provide clear policy direction and skilled teams, are likely to attract and keep top talent. Conversely, slower adopters may face growing retention risks.

AI Is Already Embedded in Daily Decision-Making

Despite the risks, AI adoption is nearly universal already.

Just 1% of surveyed companies have not yet adopted AI tools, while 72% already use AI for strategic decision-making. The most common applications include:

• Cybersecurity threat detection (73%)
• Supply chain risk management (69%)
• Automated regulatory compliance (67%)

Looking ahead, 85% of executives believe AI implementation will be a primary driver of growth over the next three years. This signals that AI is moving from experimental deployment to long-term strategic integration.

Supply Chains Shift Towards Latin America

Vistra’s survey also reveals changing dynamics beyond AI. Nearly six in ten business leaders (59%) are redirecting supply chains to Latin America, which is now the top alternative to China, followed closely by Southeast Asia (57%). Europe, the Middle East and Africa lag far behind at 22%.

This shift echoes the broader trend of resilience-focused sourcing strategies, where diversification and proximity to talent markets are becoming increasingly important.

According to Saul Howerton, Vice President and Global Head of People Advisory at Vistra, cross-border flexibility is now “vital to competitiveness”. Firms capable of shifting people, capital, and operations quickly are best positioned to navigate global uncertainty and capture new growth opportunities.

Regulatory Pressure Mounts

Regulatory change – spanning ESG rules, financial regulations and new AI requirements – has become the top policy concern for 28% of respondents, edging out tariffs and trade policies (27%). But uncertainty in trade policy still has consequences: 32% of businesses are freezing hiring or actively reducing headcount in response to tariff instability.

These pressures illustrate the increasingly complex environment leaders must navigate – one where regulatory frameworks evolve as rapidly as the technologies reshaping them.

The New Era of Competing Fears and Ambitions

AI has become both the catalyst for growth and the source of greatest concern. This duality – that is, innovation mixed with anxiety – defines a new chapter in business strategy. Companies are accelerating adoption even as they grapple with compliance, data protection and regulatory uncertainty. Meanwhile, talent, supply chains and investment priorities are being reshaped around digital transformation.

As Jim Lee notes, the coming years will reveal a widening gap between AI leaders and laggards. Those who embrace the opportunity, responsibly and proactively, are poised not only to survive but to define the future of business competitiveness.