00:00Let's go back to the start of this year because you came in certainly here in the United States with a big change in administration, a lot of expectations about what that would mean for business and finance.
00:08Now, as we sit here, basically the last week or so of 2025, was this kind of did it play out kind of how people expect it?
00:15Yeah, it's a great. Yeah, it's a great way to look at it. I mean, you know, year over year CEOs nailed it on the likely increase of M&A because it's 40 percent year over year.
00:26You've reported it here very well that there will be reframing of the regulatory environment, which there has been, that capital access would be there for companies, quality companies that needed it.
00:36So all in all, the the optimism has transpired in the ways that they expected.
00:40I think the issue that none of us were prepared for is just how complex and disruptive trade and tariffs would be.
00:46And that has that is probably the one to borrow your phrase from your market wrap up for the week.
00:51You know, that's upbeat, but there are some relative upbeat.
00:55Is there any sense that a lot of CEOs and executives see that kind of smoothing out, meaning the uncertainty that we saw around not not only just trade policy, but really a lot of policies coming out of Washington.
01:04And it seems like I don't want to be too presumptuous, but it seems like as you got towards the end of the year, it seems like people kind of at least felt like they kind of figured out kind of the pace of what was coming out of the White House and they could adapt to it more.
01:15Is that fair?
01:16I would say it's fair. I also think about it.
01:18I think CEOs have had to become the chief disruption officers from covid through war, through the most consequential new technology history.
01:27And then, you know, half the planet went to the polls last year and we've had new governments in many of those countries.
01:33So CEOs have had to adapt and learn muscle memory and bring in new models.
01:39So I think they're stronger, more resilient and more able to meet new challenges and disruption than ever before.
01:45So I don't think there's any sense that these challenges have gone away.
01:48But I think they're more robust management capability to deal with what may come.
01:52Well, you say disruption in 2025, almost 2026.
01:55People think about AI, of course.
01:58That has been the dominant disruptive factor over the past several years.
02:02A bullet point from your survey is that 68 percent of CEOs are increasing investment in AI and AI spending.
02:11Increasing investment, but the return isn't necessarily guaranteed there.
02:15Yeah, this is probably one of the most striking points, I think, when we dig into it.
02:19Not surprisingly, it's the largest spend item on the on the docket for next year for CEOs.
02:26And not surprisingly, investors support that.
02:28What is surprising is CEOs have more of a decadent, a long-term view on AI as a catalyst for business transformation.
02:36And I don't think investors are there yet.
02:37I think they're looking at ROI.
02:39I think next year, I think your show, I think the world is going to be looking at how have CEOs rested the narrative back into how do enterprises change their business models,
02:51find new markets, expand their services, and not just for a hunt for efficiencies and effectiveness.
02:57And if you're going to transform your business, that takes years.
03:00It takes time.
03:01It's also, I think, relevant to the point that surprisingly, perhaps, most CEOs are going to hire more people in the first half of next year.
03:08And many of that is to hire talent in to avail of and meet the moment that AI presents.
03:14I don't think it's a long-term trend you could extrapolate.
03:16But it shows that I think that tension between investors and CEOs is real.
03:20Yeah.
03:20But you have to back the CEOs.
03:22They know how to build an enterprise through the cycle.
03:24Well, it's really interesting.
03:25It reminds me of the conversation around some of the critiques of the quarterly earnings cycle that basically sort of prioritizes or places a premium on short-term thinking.
03:36But to your point, I mean, if you're trying to transform your business, in many cases, that takes years.
03:42And, you know, this AI spending conversation or conflict that seems to have risen, it feels like it neatly encapsulates that conversation.
03:51We've had this year, perhaps, of the AI and the CapEx AI economy and everything else.
03:56I think next year is going to be about everything else, which is how does that technology, how do those investments get harnessed into transforming businesses?
04:04And this year and last year was about how do you use this new transformative technology to derive efficiencies, effectiveness, cost out, perhaps.
04:13You know, if this year was about AI and the CapEx economy supporting that, next year would be about how the enterprises are transforming with AI as the catalyst.
04:21I have a couple questions just on the policy front, particularly here in the United States, because we are going through another election year, a midterm election year that could actually have some huge ramifications for some of the policies that have already been implemented, plus some of the proposals here.
04:34Do the CEOs, do they worry about that as much as they do sort of the presidential election cycle?
04:40I know it's just, you know, individual congresspeople and senators getting elected, but if in aggregate it can have an impact on policy, when do they start to pay attention?
04:49I think CEOs today have the dashboard on a range of issues that probably historically they may not have had to have.
04:57Geopolitics, global regulation, sentiment around political changes, war, new technologies.
05:07There isn't an issue I don't think that they're ready, that they're not ready for.
05:10And they haven't got a team of people modeling out the implications of option A, B or C taken.
05:15And we, as we sit here today, we still think that the Supreme Court will rule on the president's trade and tariffs.
05:23There's no company, no company that we advise in our 40 locations around the world that isn't thinking through the range of options that might happen.
05:31You can extrapolate that out to elections next year, to elections in this country and overseas.
05:36So I think that chief disruption officer crown that the CEO wears is real, and that's here for good, I think, too.
05:44Well, Paul, we started this conversation talking about the relative optimism, relative upbeatness that CEOs feel right now.
05:53How might that translate into the M&A landscape in 2026?
05:57It feels like we saw dealmaking come back a bit in 2025, finally.
06:02And you think if CEOs are feeling pretty good about the state of things that, you know, they've got sorted through a lot of maybe some of the boogeymen of 2025, does that translate into increased dealmaking?
06:14Yes, I think you've covered it very well here today over the last number of weeks across strategic commodities, across technology, across industrials.
06:23There are surveys that show that, you know, people are loaded for bear in terms of maximizing M&A opportunities next year.
06:30And the second half of this year, I think, shows that has been the promise of M&A this year has transpired.
06:36So across the sector, capital doesn't seem to be a challenge for strong companies.
06:41Ambition is there.
06:43And, you know, this consequential moment of AI means that every industry, I think, is subject to rationalization, consolidation or M&A.
Comments