It’s proving to be almost impossible to set the bar too high for AI when it comes to making money.

I’ve already covered how the gains of companies that have invested heavily in artificial intelligence are the difference between the S&P 500 being up over 10% YTD and possibly being in the red.

I have also talked at length about how the need for advanced processors by AI companies have driven Nvidia (NASDAQ: NVDA) to historic gains.

But I may still be selling AI short…

At least that is according to a report released by McKinsey Global Institute (MGI).

The economics research firm believes that artificial intelligence has the potential to add up to $4.4 trillion to the global economy.

Annually.

This is a staggering total.

If AI was its own country, a GDP of $4.4 trillion would make it the fourth largest economy in the world. Just behind Japan’s 2022 total of $5 trillion.

As AI technology gets integrated into existing systems and improves productivity in established institutions, its total economic impact could account for an incredible $25.6 trillion.

The reasoning behind this bold projection is that MGI expects half of all labor will switch to being automated between 2030 and 2060.

Per the report, we have only just started to see the impact of generative AI.

Excitement over this technology is palpable, and early pilots are compelling. But a full realization of the technology’s benefits will take time, and leaders in business and society still have considerable challenges to address. These include managing the risks inherent in generative AI, determining what new skills and capabilities the workforce will need, and rethinking core business processes such as retraining and developing new skills.

Breaking It Down

Where does this insane market-moving potential come from?

The MGI report breaks it down by use case:

The biggest beneficiaries of AI technology, according to the report, are sales and marketing operations. According to MGI…

Generative AI has taken hold rapidly in marketing and sales functions, in which text-based communications and personalization at scale are driving forces. The technology can create personalized messages tailored to individual customer interests, preferences, and behaviors, as well as do tasks such as producing first drafts of brand advertising, headlines, slogans, social media posts, and product descriptions.

Within marketing specifically, the proposed benefits of generative AI are:

• Efficient and effective content creation
• Enhanced use of data
• Search engine optimization
• Product discovery and search personalization

These improvements could lead to increased productivity equal to somewhere between 5 and 15 percent of total marketing spending.

For sales, AI’s ability to increase sale probability and generate valuable leads could increase overall productivity somewhere between 3 and 5 percent of overall sales expenditures.

Software engineering could see the largest percentage boost of any industry.

No profession has been quicker to adopt the AI technology currently available than those responsible for writing and debugging code for software.

The advancements could result in up to a 40% value improvement in the field.

With that, I want to hear your thoughts. Is this report overstating AI’s potential? Is it just a matter of time before AI takes over everything? Let us know about this, or anything else at feedback@technologyprofits.com.