Artificial intelligence will bring deep transformation to nearly three-quarters of business sectors by 2035, putting $4.7 trillion in profits at stake, according to a report published Tuesday by Bain & Co. The global management firm found that the technology's effect on productivity, market share and innovation will deliver more profound change than the rise of the internet. AI is collapsing the cost of production itself, unlike the internet's main impact of slashing distribution costs and easing customer access.
AI is set to triple the economic impact of the introduction of the internet in roughly a decade, Bain & Co.'s research shows. About 71% of sectors are projected to be transformed by AI, compared to 41% of sectors transformed by the internet between 1995 and 2015. Advancements in productivity represent $1.1 trillion in new profits, but innovation and competitive shifts represent $3.5 trillion in profit changes. On average, automation saved workers about 11 hours a week, Glean's Work AI Institute found in June, though employees reported spending much of that saved time managing AI outputs.
"The CIO is uniquely positioned to play a leading role as this conversation requires a granular understanding of what the technology makes possible," Dunigan O'Keeffe, a partner in Bain & Co.'s strategy practice, told CIO Dive. The impact AI will have on enterprises is less about the technology's transformation and more about business transformation, O'Keeffe said. Productivity, innovation, market share and competitive shifts created by AI will provide the most impact on the business sector, Bain & Co.'s research shows. While some managers report productivity gains from AI use, the ROI remains hard to measure.
The report's analysis explains that whereas the internet primarily reduced costs associated with getting products to customers, AI fundamentally changes how those products are made in the first place. This difference drives AI's broader and faster transformation across industries. The technology is driving meaningful change in operational capabilities for companies and the sectors they inhabit, delivering results through its ability to accelerate work processes by taking over some human-led tasks and optimizing production in physical settings. O'Keeffe said seeking out general productivity gains is good, but could have a smaller effect than chasing tailored, specific business goals that AI can help achieve.
CIOs who want to understand how their industry will be affected should continue to push their tech transformations, O'Keeffe told CIO Dive. They need to place a stake in the ground on the future industry profit pool for their sector, how they will win, and then what that requires from technology. Amid this period of transformation, CIOs should plan to build proprietary intelligence—the specific data, technology and learning systems that will create advantages for their companies. Tech leaders should benchmark their companies' speed against the fastest-moving competitors in their sectors and plan to share frontline learnings that build understanding about the direction of the company's investments into the technology. The CIO is a catalyst for making the transformation dynamic, keeping the pulse on where the organization is seeing results, the new barriers to attack, and how the frontier of technology is evolving, O'Keeffe said. Companies that focus exclusively on efficiency without pursuing strategic differentiation may find themselves left behind as competitors use the same tools to reshape market structures. The real challenge for technology leaders isn't deploying AI across operations but determining which capabilities will define competitive advantage in a landscape where everyone has access to similar tools.