Davos WEF 2024: McKinsey's Noshir Kaka Sees Gen AI Clocking Up To $4.4 Trillion Of Annual Global GDP

Gen AI, the most revolutionary technology ever invented, would generate between $2.6 trillion and $4.4 trillion in annual global GDP, according to Noshir Kaka, global co-lead of McKinsey & Co.’s technology practice.

This year, he said, the focus in Davos is mostly around these three topics: resilience, Gen AI and women's health.

There is a massive challenge to scaling up Gen AI, despite everyone having seen that the pilots were more successful than what was predicted, Kaka, senior partner at McKinsey, told NDTV Profit's Niraj Shah on the sidelines of the World Economic Forum 2024 in Davos.

"We are seeing a 20% expansion of market opportunity. From the net new cases from Gen AI, we are seeing 30% developer productivity; that is eminently possible to capture, and of course there is a human challenge that's holding that back," Kaka said. "There is 40% effectiveness in everything you do about support functions. When a developer uses an AI tool, they report 80–100% more satisfaction."

"If you have great talent, you better give them the tools that are actually world-class," he said.

"The phenomenon of levelling, which technology has always done, will continue. The large company will get larger, and the small company will get larger as well, and if you are in the middle, you have a challenge," Kaka said.

The good news for India-centric companies is that we are going to forever require excellent technical talent. " Gen AI will make India thrive in productivity," he said.

Despite a lot of fear out there that Gen AI will disrupt productivity, the companies that get ahead of the game will retool their people and will actually continue to see evolved demand.

India is at the centre of some of the largest data sets in the world. "If you look at the next six years, one out of every four humans joining the workforce is an Indian. That's a massive draw for the companies," he said.

India has the potential to be a service powerhouse in electronics manufacturing, Kaka said.

"You can move your service ecosystem relatively faster, but manufacturing takes time. We see the demand continuing, and that is the reason why the real estate demand continues to rise," he said.

"Demand will continue in the Engineering, Research and Development (field)."