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ai-radar-2025-slideshow-jan-2025 by bcg .pdf

AI radar trends for 2025

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BCG AI RADAR From Potential to Profit: Closing the AI Impact Gap JANUARY 2025
Global research of 1,803 C-level executives on AI in 2025 Company revenue Markets Industries and key functions Source: BCG AI Radar 2025 Survey Note: Revenue thresholds for survey inclusion: $500+ million USD (US, Europe, Japan, Australia); $100+ million USD (rest of APAC, Middle East, Africa). Survey conducted September to December 2024. 1 CxO represents other executives who directly report to the CEO (e.g., CMO, CFO, COO, etc.). 2 Includes CDO and CAIO. 3 C-suite includes EVP, SVP, VP, Chairman, President. C-suite3 CSO CEO CxO1 CTO CIO CDO2 >$5B <$500M $500M–<$1B $1B–<$2B $2B–<$5B Executive roles Energy TMT Industrial goods Transportation/travel/tourism Public sector Financial institutions Manufacturing Insurance Marketing Healthcare/medical Consumer/retail Real estate SURVEY METHODOLOGY 323 256 250 192 145 144 142 110 110 49 41 41 214 200 198 182 171 102 101 87 82 81 79 65 64 46 45 38 8 28 12 US India Germany UK France Italy Singapore Brazil Japan UAE Spain Nigeria Indonesia Australia Saudi Arabia Greater China Qatar South Africa Morocco 17% 16% 22% 14% 31% 5% 30% 8% 9% 7% 27% 14%
Where is the value in AI?
2023 2024 2027 +30% +60% AI ambitions are growing alongside investments Source: BCG IT Spend Survey 2024. GenAI investments are projected to increase by 60% in the next 3 years
How much are you planning to invest in AI in 2025? Source: BCG AI Radar 2025 Survey (n=1,803). One in three companies across all markets are planning to spend $25 million+ on AI in 2025 Up to $25M $26M–$50M $51M–$100M >$100M 53% 59% 63% 65% 69% 69% 71% 78% 81% 83% 86% 69% 26% 23% 25% 18% 17% 18% 15% 15% 6% 12% 12% 18% 10% 9% 6% 10% 6% 9% 4% 8% 6% 5% 3% 2% 7% 11% 9% 6% 7% 8% 6% 1% 8% 2% 6% Germany India Japan Spain France UK Singapore Italy US Brazil Global One in three companies UAE
of executives rank AI/GenAI as a top three strategic priority … 75% of executives are seeing significant value from AI 25% … but, only Source: BCG Radar 2025 Survery (n=1,803).
What are leading companies doing differently?
Three value plays to maximize AI potential Deploy AI in everyday tasks to realize 10% to 20% productivity potential Reshape critical functions for 30% to 50% enhancement in efficiency and effectiveness Invent new products and services to build long-term competitive advantage Source: BCG analysis.
Leading companies go well beyond deploy … Source: BCG Build for the Future 2024 Global Study (merged with Digital Acceleration Index), (n=1,000). They focus +80% of their AI investments in reshaping critical functions and inventing new products and services 40% 42% +80% 18% Deploy Individual-productivity focused Reshape Process-level productivity aimed at reshaping critical functions Invent Company-level innovation core to the business
… but most companies aren’t yet prioritizing investments in higher-impact plays Source: BCG AI Radar 2025 Survey (n=1,803). Share of AI investments in Deploy, Reshape, and Invent initiatives 27% 29% 44% Deploy Individual-productivity focused Reshape Process-level productivity aimed at reshaping critical functions Invent Company-level innovation core to the business 56%
AI use cases prioritized Source: BCG Build for the Future 2024 Global Study (merged with Digital Acceleration Index), (n=1,000). Leading companies extract greater value by focusing their AI investments Other companies Leading companies 6.1 3.5 More ROI for AI anticipated In reality, most companies go broad and dilute efforts across multiple pilots, seeing lower ROI as a result 2.1x 40%
Yet 60% of companies are failing to define and monitor any financial KPIs related to AI value creation How is your organization tracking value creation from AI? Leading companies set clear goals and track top- and bottom-line impact Source: BCG AI Radar 2025 Survey (n=1,803). 32% 28% 16% 24% Not tracking yet Operational only Financial only Operational and financial 60%
Source: BCG AI Radar 2025 Survey (n=1,803). Note: AI talent refers to AI specialists (i.e., data scientists, ML ops engineers) and non–specialists (i.e., upskilled talent leveraging AI tools). Leaders follow the 10-20-70 principle to create value 10% Algorithms 20% Technology 70% People and processes companies struggle to: · Reimagine workflows and drive incentives, culture, and change · Hire AI talent and upskill workforce 2 in 3 … but
Source: BCG AI Radar 2025 Survey (n=1,803). Note: Percentages correspond to share of executives ranking risk in their top 3. AI risks that companies must navigate 66% 48% 44% Data privacy and security Lack of control or understanding of AI decisions Regulatory challenges and compliance
Cybersecurity remains critical Source: BCG AI Radar 2025 Survey (n=1,803). Recognize that their AI cybersecurity measures need further improvements 76%
2025: The year of AI agents?
What an agent is What an agent does What is an agent? Simply put, it’s an AI that has learned to use tools Source: BCG Analysis Memory Remembering across tasks and changing states Reasoning Decomposing a problem and planning actions Systems Accessing external systems on your behalf Observes Collect and process data from environment Plans Evaluate possible actions and prioritize toward a goal Acts Execute by leveraging internal or external tools/systems
15% 67% are considering autonomous agents as part of their AI transformation Source: BCG AI Radar 2025 Survey (n=1,803). However, agents require deep reimagination of work and are not a silver bullet for impact
Role that companies see for AI agents moving into 2025 Source: BCG AI Radar 2025 Survey (n=1,803). Optimism around AI agents is consistent across geographies Central or complementary role Exploring Germany India Japan Spain France UK Singapore Italy US Brazil Global UAE 37% 26% 32% 31% 34% 27% 34% 30% 38% 31% 18% 32% 37% 46% 40% 40% 36% 41% 33% 33% 24% 30% 38% 35% 74% 72% 72% 71% 70% 68% 67% 67% 63% 62% 61% 56%
AI agents: Key leadership priorities Unlocking new potential to reshape processes and services Agents deliver up to 3x more productivity and speed benefits compared to traditional assistants Breaking down silos The biggest opportunity is seamless enterprise collaboration through zero-touch services, advanced planning, and automated customer 360 activation Managing the risks of more complexity AI agents are more complex than assistants, requiring robust testing and optimization to manage operational and cyber risks effectively Cutting through the hype Mislabeling and overhype of “agents” will dilute trust and lead to unmet expectations; leaders must clarify capabilities and set realistic goals Moving forward Success lies in targeted, high-impact applications, focused on practical design, seamless integration, and data quality over hype Source: BCG analysis.
With AI agents on the rise, who will hold the power: humans or AI?
Source: BCG AI Radar 2025 Survey (n=1,803). Executives see talent and AI as complementary 22% 64% 14% Prioritizing human talent, using AI only when necessary AI taking the lead, but humans retaining oversight AI and humans working side by side Human-centered AI-focused
Less than 10% of executives expect a decrease in headcount due to AI automation Source: BCG AI Radar 2025 (n=1,803). 8% 68% 17% 7% More FTEs Existing workforce Net neutral Fewer FTEs Increase headcount, adding new skills More productivity and upskilling of existing talent to meet AI needs Decrease headcount due to AI automation How do you expect the workforce in your organization to change? Restructure workforce with new roles to replace redundant ones
AI upskilling is accelerating, but the work is not over Source: BCG AI Radar 2025 Survey (n=1,803). ~70% of the companies have trained less than 1 in 4 of their workforce 6% 94% 71% 29% 2023 2024 Companies with more than 25% of their workforce trained on AI/GenAI tools
Singapore and Japan lead in AI/GenAI upskilling; Brazil and Italy are falling behind Source: BCG AI Radar 2025 Survey (n=1,803). 38% Japan 30% Germany 29% Spain 29% France Singapore 44% 29% US 27% UAE 26% India 20% Italy 20% Brazil 29% UK 29% globally Companies with more than one-quarter of their workforce trained on AI/GenAI tools
Strategic playbook for CEOs
Leading companies maximize value creation by... Breaking through AI’s imagination gap Rethink what is possible with AI and business transformation Targeting and prioritizing AI efforts Focus on a few transformative opportunities in core functions Putting AI at the service of enterprise ambition Define and track clear KPIs Leading the cultural and organizational change Lean in personally and drive the change Preparing for what’s next Anticipate AI’s next value play and accompanying risks Source: BCG analysis.