State of AI 2025 Mckinsey: Brief summary

Recently read the paper “State of AI 2025 by McKinsey. Very detailed analysis of the responses from many In this Blog, I want to highlight few points of high relevance as you advise and implement AI solutions to your company or customers.

1. One of the major highlights from the report is the steady increase in the use of Gen AI across enterprises since last year. This is a good sign, as predicted by our @aiThoughts.Org think tank.

2. Marketing and sales, Service Operations, and Software Development are the top functions using GenAI. We need to go a few levels deeper and peel the onion to see what kind of applications in sales and marketing are being used. For e.g., how much is the domain content in these applications? For example, Investment Banking, Supply Chain, Pharma, etc. There was mention of the use of GenAI to generate images for marketing brochures, etc, which makes me assume less domain content.

3. The issue of hallucination/inaccuracy still seems to be a major concern. All the respondents say they are manually validating at least some % of the GenAI-generated output before it is sent to the end customer. Almost two-thirds check more than 50% of the output, and one-third check 100% of the content. Many AI Gurus are saying that LLM-based models will continue to have this issue even in newer versions with large scaling. This remains the major concern for the enterprises.

4. Risk and Governance seem to be at least considered. The top 3 risks identified are Inaccuracy, IP infringement, and privacy. Unfortunately, only very large enterprises are putting a formal plan and resources to do risk mitigation. This area is a major concern.

5. While there are positive reports on cost savings at a sub-function level, almost all respondents felt that overall Enterprise level EBIT has not increased due to GenAI initiatives. There is a huge expectation that the step from Cloud, Mobile, IOT ( Digital) transformation to AI Transformation and very quickly the AI community need to start proving this giant step. Otherwise, the trend of positive adaption may reverse.

We advise all of you to read the report in full and make the necessary adjustments to your plans and pitches.

More Later

L Ravichandran