A recent McKinsey survey reveals a significant increase in AI adoption, with 72% of organizations integrating AI into at least one business area by March 2024, up from 55% in 2023. Additionally, around 50% of respondents indicated that their organizations have adopted AI in two or more functions, a rise from 33% last year.

The survey, conducted on May 30, underscores a substantial leap in the use of generative AI, with adoption rates nearly doubling from 33% in 2023 to 65% in 2024. This surge breaks a pattern of steady, yet modest, growth in AI integration, which ranged between 47% to 58% annually from 2018 to 2023. McKinsey highlighted this shift as a dramatic increase after years of stagnation in AI adoption rates.

Higher seniority individuals reported the most significant growth in using AI both professionally and personally. The Asia–Pacific region and Greater China exhibited the highest growth rates in AI adoption. The most common areas for AI application are marketing and sales (34%), followed by product and service development (23%), and IT functions (17%), the latter not previously highlighted in McKinsey’s research.

McKinsey's survey also noted a shift in investment patterns, with firms allocating nearly 5% of their digital budgets to generative AI, comparable to analytic AI investments. These investments have primarily aimed at reducing human resource costs and boosting revenue, particularly in supply chain and inventory management for generative AI, and in service operations and sales for analytical AI.

The report arrives in the wake of significant advancements in AI hardware. On June 2, Nvidia announced its latest generation of AI chips, Rubin, following the previous Blackwell series unveiled just months prior. Nvidia dominates the AI chip market, holding an estimated 70% to 95% share according to Mizuho Securities. The company reported record-breaking quarterly revenue at the end of May.

Nvidia’s advancements are part of a broader competitive landscape in AI technology. On May 3, AMD, Nvidia's chief competitor, launched its new line of AI chips, signaling intensified competition in the AI hardware market.

McKinsey's findings highlight a pivotal year for AI adoption, with substantial increases across various sectors and functions. The rapid growth in generative AI usage and significant investments in AI technologies suggest a transformative period ahead for businesses worldwide. As companies continue to integrate AI, the technology's role in driving efficiency, innovation, and profitability is becoming increasingly evident.