Where we are coming from

In the first two weeks of October, only 5% of American businesses used AI to produce goods and services, highlighting that market enthusiasm has not yet translated into widespread adoption in the real economy. However, an all-time high of 40% of S&P 500 companies mentioned AI on earnings calls in both Q1 and Q2 of 2024. In the IT sector, 91% of companies discussed AI. Those that cited AI on Q2 earnings calls saw a 12.2% increase in stock prices since December 31, 2023, compared to an 8.6% increase for companies that did not mention AI.

Where we are at

Approximately 70% of workers recognize the potential of AI to improve the quality of their work, using technologies such as automated reading and writing, predictive maintenance systems, and various monitoring applications. Workers leveraging AI can command a 25% wage premium. Additionally, 69% of CEOs across industries believe AI will require most of their workforce to develop new skills. Conversely, 55% of individuals express concerns about job security. However, Goldman Sachs predicts that workers displaced by AI automation will eventually become reemployed, although the transition may take time.

What are the obstacles?

Companies face challenges related to data quality and data security. AI systems relying on poor-quality data produce unfavorable outcomes. Organizations must also address privacy concerns and mitigate associated risks. Furthermore, current networks are not equipped to handle the increased demands of computing, storage, and network infrastructure required by AI applications. To support the complexity and scale of these workloads—such as training, advanced data analytics, and autonomous systems like intelligent chatbots—firms must make significant investments. While many are not yet prepared to do so, those that move quickly will gain a decisive advantage over slower competitors.

Where we are going

Baseline AI adoption is projected to boost productivity growth by 1.5% annually over the next decade, with an upside scenario of 3%. The software industry is expected to benefit the most, with margin expansion exceeding 5% within five years. Other sectors—including energy, utilities, media, transportation, commercial services, and consumer durables—are estimated to experience margin growth of more than 2%. In total, AI-enabled cost savings could reach up to $55 billion annually across S&P 500 companies.