In this episode of the McKinsey on AI podcast miniseries, McKinsey’s David DeLallo speaks with McKinsey Global Institute partner Michael Chui and associate partner Bryce Hall about the latest trends in business adoption of artificial intelligence (AI). They discuss where the technology is being used most across industries, companies, and business functions; the keys to getting impact from AI investments; and what lies ahead.

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David DeLallo: Artificial intelligence. There’s no shortage of predictions about how it could fundamentally change the way we live and work. Over the past few years, companies around the world have been figuring out exactly how AI technologies can improve their performance in a number of areas across their business.

But is AI actually delivering significant results? Moreover, what can we expect to see as we move into a new decade of AI use and development? I’m David DeLallo with McKinsey Publishing. To answer some of these questions today, I’m joined by Michael Chui, a McKinsey partner with the McKinsey Global Institute, who is based in our San Francisco office, and associate partner Bryce Hall from our Washington, DC, office.

Both have been doing plenty of work with businesses on AI and have also conducted a good amount of research in this space. Bryce and Michael, thanks so much for joining the podcast today.

Bryce Hall: Thank you.

Michael Chui: Thanks, David.

DeLallo: To start off, it would be great to get a bit of a lay of the land here. Michael, can you start by answering the first question of where we are today overall in terms of adoption of AI across businesses?

Chui: We’ve been fortunate to work with the McKinsey Quarterly to survey thousands of different executives around the world on their use of AI. In our most recent survey, we received responses from 2,300 executives globally.

And what we saw were significant increases in adoption levels of AI basically throughout the world, in North America, Europe, Asia–Pacific, and Latin America. And in Asia–Pacific and Latin America, the shares of respondents who say their companies have embedded AI across multiple functions or business units nearly doubled since the previous survey. When we look across all of these regions, even China, we see similar aggregate reported levels of adoption, even though there is a lot of variation within countries and across countries from individual respondents.

Hall: I would agree. Overall this research is showing significant growth in AI adoption. Across the board, we saw nearly a 25 percent year-over-year increase in the use of AI in standard business processes. We’ve moved beyond the phase of “Is AI a shiny object?” toward broader mainstream adoption and actual value creation.

DeLallo: What are some differences that we see across companies, in terms of where they seem to be placing their AI investments?

Chui: One of the things that we’ve discovered is the broad applicability of this technology across every sector and function. And that the companies that are able to drive the most value from certain use cases are in fact the most likely to be deploying AI within those use cases.

For instance, for companies that drive a lot of their value from top-line levers, such as marketing and sales, we see more investments, more experiments, and more value [from AI] being captured by those types of companies in marketing and sales, whether it’s better segmentation, more personalized offerings, and other things of that sort.

Conversely, we also see companies that drive a lot of their value from bottom-line or operational levers investing in [AI in] those areas. So whether it’s improving their logistics function, being able to reduce their inventory, increasing their inventory turns, increasing their OEE [overall equipment effectiveness], those are the types of use cases that those companies have started to invest in and have been capturing value on the cost side.

One of the other things that is interesting is that we’re very early in this trend. As much as we’re seeing this growth in adoption, less than a third of the companies that we surveyed have deployed AI in multiple businesses or functions. And so there’s a lot of additional growth possible, given that AI can create value all across the business.

DeLallo: So 30 percent of businesses have adopted AI across multiple areas in their company. Did you, Michael, find that number to be higher than you expected? Lower than you expected? Right on target?

Chui: Well, it’s funny. There’s so much hype about AI that I think you could easily have expected people to think that there would be a lot more adoption. But we also know from our studies of doing work across many different technologies that it’s hard work to deploy technology within an organization, not only because the technology problems are hard but also because the change management is really hard.

So in some ways it’s not surprising that there’s so much additional opportunity here. And we certainly know lots of companies that are going after that opportunity. But it is really hard work. There’s a reason why this doesn’t happen faster.