New McKinsey Study Reveals Rising Adoption of Generative AI Among Businessesby Fintechnews Switzerland September 22, 2023
Despite the nascent public availability of generative artificial intelligence (AI), experimentation with the technology is already common and organizations are deploying tools leveraging generative AI at a fast pace, a new study conducted by McKinsey found.
McKinsey’s Global Survey on AI, which polled in April 2023 more than 1,600 participants at organizations from various industries, found that one-third of the businesses surveyed are already using generative AI regularly in at least one business function.
Results also show that AI is rising from being a niche topic relegated to tech employees to becoming a focal point for company leaders. Nearly one-quarter of surveyed C-suite executives indicated using generative AI tools for work, and more than one-quarter of companies already have generative AI discussions at the board level.
Moreover, because of advances in generative AI, companies are looking to commit more money into experimenting and deploying AI tools. 40% of respondents polled by McKinsey revealed that their organizations are planning to increase their AI investments.
Adoption of AI has more doubled over the past six years, data from McKinsey show, soaring from 20% in 2017 to 55% in 2023.
Use of generative AI across geographies and business functions
While the reported use of generative AI was found to be quite similar across seniority levels, it is highest among respondents working for North American organizations.
22% of respondents working at companies located in the region said they use generative AI regularly for both work and outside of work, a share that stands at 18% in Asia-Pacific, 14% in Europe and 10% in Greater China.
Across industries, usage of generative AI is the highest in the tech, media and telecom sector, with 19% of respondents working in the sector reporting using generative AI regularly for work and outside of work. Tech, media and telecom is followed by financial services as well as business, legal and professional services, both recording a 16% usage rate.
Looking at use cases, the study found that the most commonly reported business functions using generative AI is marketing and sales (14%), followed by product and service development (13%) and back-office support (10%).
These results suggest that organizations are deploying the tech where they believe generative AI has the most potential. A previous McKinsey research revealed that these business functions, along with software engineering, could have the biggest impact, possibly delivering about 75% of the total annual value from generative AI use cases.
The rise of generative AI
Generative AI, a category of AI algorithms that are capable of generating new and realistic content based on the data they have been trained on, has been a hot topic within the business community ever since OpenAI’s ChatGPT went viral on November 30, 2022.
The AI chatbot, which has been praised for its versatility, intelligence, and ability to engage in human-like conversations, surpassed one million users in just five days, and in January 2023, it surged past the 100 million monthly active users mark, becoming the fastest-growing consumer app in history, according to analysts at Swiss bank UBS.
The rise of ChatGPT has sparked a frenzy in the tech community and prompted organizations from around the world to ramp up generative AI development as they race to capture its value.
McKinsey estimates that generative AI features stand to add up to US$4.4 trillion to the global economy annually. While the technology is expected to have an impact across all industry sectors, banking is projected to be among the sectors the most impacted.
Estimates by the consultancy show that the technology could potentially generate value from increased productivity of 2.8-4.7% of the industry’s annual revenues, translating to an additional US$200-340 billion in revenues annually.
Funding to generative AI startups has increased substantially over the past years and reached a new all-time high in 2023.
In the first six months of the year, funding to the space shot up more than fivefold compared to full-year 2022, totaling US$14.1 billion, data from market intelligence platform CB Insights show.
18 generative AI companies have already reached unicorn status, including Anthropic, Cohere and Adept, which all achieved the coveted status earlier this year.
Featured image credit: Edited from freepik