Leading Off: A leader’s guide to the tech trends that matter most

ESSENTIALS FOR LEADERS AND THOSE THEY LEAD

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Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms

Welcome to the latest edition of Leading Off. We hope you find our insights useful. Let us know what you think at Alex_Panas@McKinsey.com and Axel_Karlsson@McKinsey.com.

—Alex and Axel

How can leaders keep up with the blistering pace of innovation? It’s a daunting task to monitor all of the fast-moving advancements and expert predictions about the global tech landscape, from AI and robotics to quantum computing and digital trust. But it’s also a must for organizations to understand which technologies hold the greatest promise of transforming and elevating their businesses and industries and the economy as a whole. This week, we look at the most important tech trends in 2025 and beyond—and how companies can pursue the right tech investments to generate growth.

An IDEA

An image linking to the web page “McKinsey Technology Trends Outlook 2025” on McKinsey.com.

Harness AI’s power

Perhaps to no surprise, AI continues to be a central tech trend. Not only is AI a powerful technology on its own, but it’s also a foundational amplifier of other tech trends that are transforming businesses across sectors, according to McKinsey’s Lareina Yee, Michael Chui, Roger Roberts, and Sven Smit. In the McKinsey Technology Trends Outlook 2025 report, they identify the 13 technologies that are most meaningfully shaping the tech landscape to help leaders decide which are the most relevant to their companies. AI leads the pack, as it “both accelerates progress within individual domains and unlocks new possibilities at the intersections—accelerating the training of robots, advancing scientific discoveries in bioengineering, optimizing energy systems, and much more,” the authors note. New to this year’s list is agentic AI, which enables organizations to construct virtual coworkers that can independently plan and execute work, creating “potentially revolutionary possibilities.” Another major trend is the growth in application-specific semiconductors, which has fueled the development of new products to meet rising demand for computing capacity, memory, and networking for AI training and reference .

A BIG NUMBER

78%

That’s the share of respondents who say their organizations use AI in at least one business function, according to a McKinsey Global Survey published in March. That’s up from 72 percent in early 2024 and 55 percent in 2023. By function, respondents most often report using AI in their IT and marketing and sales functions, followed by service operations, according to Senior Partners Alex Singla, Alexander Sukharevsky, and Lareina Yee and their coauthors.

A QUOTE

“Unlocking the full potential of agentic AI requires more than plugging agents into existing workflows. It calls for reimagining those workflows from the ground up—with agents at the core.”

That’s Alexander Sukharevsky, global coleader of QuantumBlack, AI by McKinsey, and his coauthors on how organizations can boost their competitiveness with agentic AI. Although most companies are using AI, few are reporting significant bottom-line impact—a phenomenon that the authors call the “gen AI paradox.” Agentic AI can help organizations solve that problem by automating complex business processes “to shift gen AI from a reactive tool to a proactive, goal-driven virtual collaborator,” they say.

A SPOTLIGHT INTERVIEW

An image linking to the web page “Data centers: The race to power AI” on McKinsey.com.

Gen AI’s growth is creating an urgent need for more power-hungry data centers, which has implications for both sustainability and innovation. In the United States, data centers have traditionally been concentrated in larger markets, such as the Chicago, Phoenix, and Washington, DC, areas. But these facilities are now moving to smaller markets as builders seek more power supply. “It’s about generating enough electricity. Even as the world’s consumption increases, we expect the number of data centers to be much higher,” McKinsey Partner Jesse Noffsinger says in an episode of The McKinsey Podcast. Senior Partner Pankaj Sachdeva adds that the architecture of data centers is evolving as well. “One of the big shifts is that traditional cooling methods are not enough to cool the kind of heat that’s being produced,” he says. “We’re seeing a shift to liquid cooling to be able to achieve that. There are architectural changes up and down the ecosystem that are being premised because of this increasing demand for power.”

RISE OF THE ROBOTS

An image linking to the web page “Will embodied AI create robotic coworkers?” on McKinsey.com.

Robots are making their move from science fiction stories to the workplace. AI-powered, general-purpose robots are being tested in factories, fields, hospitals, and warehouses to help people with their work—even as more unusual versions, such as robotic dogs and slime robots, are in development. Leaders who consider investing in this technology wonder how quickly robot coworkers will develop—and if they will be affordable and reliable enough to provide real value to organizations. McKinsey’s Ani Kelkar, Christian Jansen, Mark Patel, Michael Chui, and their coauthors say that progress will depend on tech advances, regulatory factors, and organizational readiness. “Robots with the general intelligence, dexterity, and autonomy of a C-3PO or WALL-E aren’t here yet, but the building blocks are emerging fast,” they say. “The companies that win won’t be those that buy in late but those that prepare early, experiment wisely, and scale responsibly.”

Lead by taking full advantage of tech.

— Edited by Eric Quiñones, senior editor, New Jersey

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