McKinsey examines value impact of generative AI

BVWireIssue #254-2
November 8, 2023

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A recent McKinsey report shows the various areas of business operations and the expected value impact from the use of generative AI. Four of these areas—customer operations, marketing and sales, software engineering, and research and development—could account for about 75% of the value that using generative AI could deliver, the report says (see the chart below). The report is “The Economic Potential of Generative AI: The Next Productivity Frontier” and is available if you click here.

mcKinseyFor business appraisers doing their due diligence on a subject entity, this chart (and the entire McKinsey report) can help assess the potential impacts on value (in terms of cash flow, risk, and growth) of efforts to deploy AI in various areas.

This report was mentioned at the ASA 2023 International Appraisers Conference during a session, Using Automated Valuation Models—If You Dare, that Rob Schlegel (Houlihan Valuation Advisers) and Byron Miller (BM Appraisals) co-presented.

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