OUR BEST NEW IDEAS FOR THE C-SUITE

Welcome to the latest edition of the CEO Shortlist, a biweekly newsletter of our best ideas for the C-suite. This week, we feature our latest research on the generative AI economy. We appreciate the opportunity to connect and hope you find our perspectives novel and insightful. Please let us know what you think! You can reach us at Alex_Panas@McKinsey.com and Axel_Karlsson@McKinsey.com. Thank you.

—Alex and Axel

The race to create value from gen AI tools is well under way, and the early leaders—and laggards—are already emerging.

European companies, according to new analysis by our colleagues at the McKinsey Global Institute, have been slow off the blocks. Why? The story is complicated, but some key figures stand out. In terms of adoption, European organizations lag behind their US counterparts by up to 70 percent. Europe has less than 5 percent market share of the raw materials needed for AI chips and only a tiny share of the markets for AI semiconductor design and manufacturing. For these reasons and others, investors have been less enthusiastic about AI in Europe. Since 2022, according to Stanford University’s AI Index, more than 90 percent of funding related to large language models has taken place outside Europe.

In other parts of the world, it’s a different picture. North American and Asian companies are champing at the bit: according to data from the forthcoming McKinsey Global Survey on AI, 76 percent of North American companies have begun their AI transformations; the same goes for 70 percent of Asian companies. But to maintain their edge, leaders will have to actively pursue transformation. As of now, less than 10 percent of Asian organizations have found a way to drive value from multiple gen AI use cases. Those that do are likely to build a competitive advantage.

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