Ep179: How AI is Changing Everything for All of Us – McKinsey & Company's Lareina Yee on the new software innovator’s dilemma

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Dec 2, 2025

Lareina Yee, Director of Technology Research at McKinsey & Company, shares groundbreaking insights into AI's transformative impact on businesses. Over 80% of companies have dived into AI, yet only 7% achieve full-scale adoption. She discusses the staggering $4.4 trillion potential of AI beyond mere cost savings and highlights how high performers see AI as a total enterprise transformation rather than just tech deployment. Yee emphasizes the urgent need for AI fluency in the workforce and calls for ethical leadership in navigating this AI-driven future.

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INSIGHT

Widespread Adoption But Limited Scale

Over 80% of companies adopt AI in at least one function, but only 7% reached full-scale deployment.
Heavy investment exists, yet 62% remain in experimentation or pilot phases.

INSIGHT

Agents Spread Fast Across Functions

Agentic AI has proliferated across many functions in just one year, from knowledge management to manufacturing.
Implementation ranges from about 45% in some functions down to 5% in others with many planning to start.

INSIGHT

AI Is An Innovation, Not Just Cost Play

AI's productivity potential is estimated at $4.4 trillion, and leaders prioritize innovation above cost savings.
Employee and customer satisfaction plus competitive differentiation drive AI investments alongside revenue growth.

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In a keynote address from re:Invent, McKinsey & Company's Lareina Yee shares fascinating data, trends and best practices on AI adoption, the future of skillsets, and leadership insights that are needed for AI transformation at scale.

Topics Include:

Over 80% of companies have adopted AI in at least one business function currently.
Despite heavy investment, 62% of companies remain in experimental or pilot phases with AI.
Only 7% of organizations have achieved full-scale AI implementation, up from 2% earlier this year.
Agentic AI has proliferated rapidly across functions from knowledge management to manufacturing in one year.
Between 45% and 5% of companies have implemented AI agents across different business functions today.
AI's productivity potential represents $4.4 trillion in economic value beyond just cost savings opportunities.
Innovation ranks as the number one goal for AI investments, ahead of cost reduction priorities.
Employee satisfaction, customer satisfaction, and competitive differentiation drive AI adoption alongside revenue growth and cost.
High AI performers view implementation as total enterprise transformation, not just technology deployment projects.
Leading companies spend 4.9 times more budget on AI investments compared to average performing organizations.
Traditional software stacks evolved to SaaS, now transforming into AI-ready tech stacks within one generation.
Job outlook remains mixed: 32% expect losses, 13% expect increases, 43% see no major change.
Since 2023, significant skill shifts show increased demand for software development and business intelligence capabilities.
AI fluency has increased seven times as the most sought-after skill across all job types.
AI fluency means using AI in everyday work, not building models or creating large language models.
Skills like driving records, coaching, customer service, and management remain harder to automate with current AI.
Transactional, data-driven repetitive tasks like inventory management and invoicing face highest automation exposure currently.
Historical technology revolutions like electricity created six to eight jobs for every one job displaced.
New roles like prompt engineering emerge, requiring skills like effective questioning rather than technical coding.

Participants:

Lareina Yee - Director of Technology Research, McKinsey & Company

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