How AI Will Transform Business Strategy in 2025: Q&A with Dan Priest, PwC's US Chief AI Officer

PwC recently launched its 2025 AI Business Predictions. How will AI reshape businesses in the new year?

Dan Priest: AI is becoming intrinsic to every aspect of how companies operate, and we predict 2025 will bring a new age of innovation – one that moves away from chasing AI use cases to using AI to power business strategy. Everything from strategy and customer offerings, to how you manage risk and preserve value, is going to evolve. And the decisions made by leaders regarding AI investments will likely be the most significant of their careers, shaping the future direction and competitiveness of their organizations.

The journey toward making AI integral will involve recognizing the importance of both transformative breakthroughs and the accumulation of incremental gains at scale. This dual focus will drive notable improvements in productivity, speed to market, and revenue, with increases achieved systematically across different areas of the business. In the new year and beyond, this strategic approach will lead to long-term reinvention across industries.

What steps should companies take to implement AI efficiencies effectively?

Dan Priest: The Japanese concept of kaizen emphasizes continuous improvement through incremental changes. That’s how business leaders need to think about AI: a foundational technology that can improve many small processes, and over time, become intrinsic to every aspect of your operations.

This involves taking a portfolio approach by balancing a systematic "ground game" for incremental wins with "roofshots" - attainable projects that require more attention – and "moonshots" - projects that are highly rewarding and require significant resources and leadership focus. This phased approach prioritizes scalable gains, using each small win to fund future efforts, while targeting transformative projects that present innovative business models and customer interactions.

To accomplish this, businesses should conduct a strategy assessment to identify what AI can and will do for their industry. Next, when it comes to data, they should embrace a "less-is-more" approach, meaning it doesn’t need to be all perfect at once. Instead, as part of the core strategy, set priorities for which segments of data architecture value should be harvested from first. From there, focus on finding the right data amount to modernize. Lastly, they should measure success with business-relevant KPIs and always balance any automation with human oversight. These steps can help organizations stay on the leading edge and also make sure their AI journey is as smooth and successful as possible in the new year.

How will AI impact a company’s workforce culture in the coming year and beyond?

Dan Priest: There is an exciting shift happening with the workforce and AI, where digital workers known as AI agents have the potential to double the workforce. But not in the way many might expect.

In 2025, we predict organizations will think of AI agents as essential to their workforce strategy. These digital workers will join teams and take on roles that can help boost speed to market and transform customer interactions. The key here is a partnership. Humans will still lead the charge but will help guide and collaborate with AI agents to increase their potential. As a result, workflows will change fundamentally, and companies will need to adapt by incorporating these digital workers into their long-term strategies.

To make the most of these opportunities, businesses should shift mindsets, update HR practices, and establish a strong Responsible AI framework to mitigate any risks to make sure these agents are being used effectively.

How is AI expected to accelerate product development?

Dan Priest: AI is poised to transform product development lifecycles by significantly accelerating the process like never before. AI has the power to iterate designs in hours, test solutions virtually, and troubleshoot more problems before moving to production. This not only shortens time-to-market but also reduces development costs and enhances the ability to personalize products to meet specific customer needs. In addition to increasing speed, AI serves as a thought partner for designers, surfacing concepts inspired by the most successful designs and proven design principles. By combining efficiency with intelligent design insights, AI drives faster and higher-quality product development.

To more fully harness AI's potential, companies should focus on bridging the skills gap within their current engineering teams. This involves training employees with data science and AI-related skills, as well as recruiting new talent that is well-versed with the tech. It’s also important to remember that embracing AI in R&D is not just about technology adoption – it's about fundamentally changing the way teams collaborate and create, paving the way for rapid innovation in product design and development.

How are companies thinking through responsible use of AI in 2025?

Dan Priest: Responsible AI is good for business. It will improve profitability and the ability to get ROI for AI investments. We expect to see a major acceleration in RAI actions in 2025, as managing AI risks will be a business imperative.

Leaders are being tasked with safeguarding their AI investments and managing the risks that come along with it. In the new year, leaders will prioritize making their AI systems as reliable as financial reports, privacy statements and cybersecurity measures – which will mean adopting systematic and transparent approaches to their AI decisions. And the key to success won’t just be about reducing risks, it will involve keeping trust in AI intact while simultaneously reaching strategic goals and achieving strong ROI.