Industry Spending on GenAI versus Potential : Some Surprises!

McKinsey report on GenAI spending versus potential by industry unlocks some surprises. Full report can be found below.

If you look closely at the chart, one thing jumps out immediately: the share of companies that are spending heavily on generative AI (“top quartile” spenders) does not align with each industry’s economic potential for AI (size of circles). Some sectors (in blue) are punching above their weight, investing more than their proportion of the overall respondent pool. Others (in gray) are under investing.

Here are a few observations and possible reasons why:

Healthcare & Tech Leading the Pack:

->Healthcare stands out at the upper left corner: though it represents a smaller fraction of overall respondents, it commands a far larger share of top-quartile gen AI spending. Why? Rising costs, a drive for personalized medicine, and administrative inefficiencies make healthcare ripe for automation and advanced analytics. This might be making early movers see AI as a serious competitive edge.

->Technology is unsurprisingly strong. With AI intertwined in products, services, and R&D, most tech companies see generative AI as a natural extension of existing capabilities.

Media/Telecom Committing Heavily:

->Media and telecom are data-rich and content-centric. These are natural strengths of GenAI. Perfect conditions for generative AI to enhance workflows, personalization, and customer engagement.

Financial Services and Retail lagging behind:

->Financial services has historically been a heavy investor in tech, but the chart suggests it’s underrepresented in top-quartile spending in GenAI. Potential reasons include tighter regulation, more cautious risk management practices, and concerns around data security.

->Consumer and Retail segment is also lagging possible owing to lower margins and fears of recession impacting the consumer spending heavily. Slower moving culture could be another reasons.

The above chart underscores that deploying generative AI is more than just potential. It’s also about organizational readiness, industry culture, and a clear vision of where (and how quickly) AI can create tangible value. Over time, as more companies see ROI, we can expect the spending curve to align more closely with where the biggest business impact lies.

Read full report here.