A new study shows that tech CEOs are optimistic about the future, even if they still don't understand millennials

Tech CEOs are bullish about their companies' growth prospects.

Some 88% of tech CEOs surveyed by KPMG said they were confident in their growth potential for their companies over the next three years. More than half — 52%, to be precise — said they expected their companies to grow by at least 2% a year over that time period.

That's more optimistic than CEOs as a whole. Overall, 44% of CEOs said they expected their firms to grow 2% annually over the next three years.

In fact, many expect to boost their headcount significantly in coming years.

Some 44% of tech CEOs expect to increase their employee base by at least 6% over the next three years, and 2% expect to increase it by at least 11%.

Again, tech leaders were more bullish than their peers. Overall, just 37% of CEOs from all industries expect to increase their headcount by at least 6% over that time period.

Tech CEOs are optimistic about their industry too.

According to the survey, 77% of tech CEOs were confident in the growth prospects of the industry over the next three years.

And they're generally confident in the growth potential for their countries.

Some 75% of tech CEOs said they were optimistic about the growth prospects of their countries. KPMG surveyed CEOs from around the globe, not just in the US.

Tech CEOs think teaming up is the best way for their companies to grow.

Some 63% of tech CEOs said strategic alliances with other companies would be important in reaching their companies' growth targets over the next three years. That was by far the most popular answer.

The No. 2 answer was "organic growth," which was named by 43% of tech CEOs.

But many are looking at mergers and acquisitions too.

Some 81% of tech CEOs said their company's appetite for M&A was moderate to high — growth was a big reason why.

M&A was the third-most-cited strategy tech CEOs planned to use to hit their growth targets; 35% listed it.

Meanwhile, among the top reasons they cited for driving the interest in M&A were that it would "transform our business model faster than organic growth will deliver," and to "increase market share."

Many tech CEOs are gung-ho about artificial intelligence.

Slightly more than half — 51% — of tech CEOs are at companies that are already using artificial intelligence to automate particular processes. But they don't think such moves are going to lead to a net loss of jobs. In fact, 60% think AI is going to create more jobs than it destroys.

And many don't think they'll have to wait long for their AI bets to pay off. Some 41% said they expect to see a "significant" return on their investment in AI in the next three to five years.

Tech CEOs see all kinds of potential uses for AI.

When asked what they think will be the biggest benefits AI will offer their companies, the most popular answers the tech CEOs gave were that it would improve the experience they offer customers (42%), better their ability to manage risks (40%), improve their ability to control their data (39%), boost their revenue growth (38%), better their ability to analyze data (37%), and give a jolt to their productivity (37%).

As bullish as the tech CEOs are in general, they also have some specific worries.

Chief among them: the growing sentiment against globalization.

When tech CEOs were asked to list the greatest risks to their companies' growth, the most popular answer they gave was a "return to territorialism."

As KPMG explained, that's the fear that countries including the US are moving away from the globalized free trade economic system and are looking to focus on their own national economic interests to the exclusion of others'.

But they're also worried about cybersecurity and protecting their customers' data.

The second most popular answer tech CEOs gave for the biggest threat to their businesses was the risk posed by cybersecurity — 45% listed it.

But that may understate the importance they place on the issue. Some 59% of tech CEOs said one of their most important responsibilities is to protect their customers' data "to enable my organization to grow its customer base in the future." And 49% agreed with the statement that "a strong cyber strategy is critical to engender trust with our key stakeholders."

And they find millennials to be a challenge.

Tech CEOs see multiple difficulties in trying to reach millennials. When asked what their biggest challenges are in reaching such younger consumers, the top answer they gave — cited by 53% — was that they found it tough to compete for millennials' attention with other online sites and services.

Some 44% said they were having trouble meeting millennials' expectations that they offer an on-demand service. About 43% said they were having difficulties adapting their sales and distribution model for the younger set, while 42% said they were struggling to reposition their brands for them.

But many are just having a tough time even distinguishing millennials from other consumers. Some 40% said they were struggling to understand how the younger generation's needs differed from those of older customers.