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Illustration: Rebecca Zisser/Axios 

A pecking order is evolving in the newest stage of the digital era: aggressive early adopters of artificial intelligence are reporting elevated earnings and may be forming "an insurmountable advantage" over rivals, according to the McKinsey Global Institute.

Why it matters: Companies failing to quickly embrace AI to improve growth risk falling further and further behind, paring their ability to attract top talent and leading to more concentration of market power within a few "superstar" firms.

Situational awareness: The report does not name the early adopters nor their industries, but in terms of pure AI research, nine companies — all in the U.S. and China — are believed to tower over peers with among the best talent and little chance for anyone else to catch up. They include Google, Microsoft, Baidu and Tencent.

"Extensive AI adopters had better financial performance. They are looking at AI as a growth opportunity by improving quality and creating entirely new products. Limited adopters see it as only a way to save on costs."
— Susan Lund, co-author of the report, to Axios

What the report says: McKinsey surveyed 3,031 business executives in seven western countries in North America and Europe. Of those self-identifying as "extensive adopters" of AI, 71% said they expect revenue growth exceeding 10%. In McKinsey's view, the signs point to the coming AI-infused giants.

Read this: "The pattern of significant growth and revenue gains going to firms at the forefront of adoption looks set to continue. Their ability to reinvest these gains and pull even further ahead of competitors may create an insurmountable advantage, and increases the importance of all companies to consider how automation and AI could affect their businesses."

  • One downside: Already, researchers believe that the increasing dominance of big tech companies is partly to blame for wage stagnation in the U.S. and elsewhere, because companies left behind can't afford to pay the higher rates earned at dominant rivals.
  • McKinsey sees the danger of the same happening in AI: "The wages that [laggard firms] offer may be lower as a result of not reaping the economic benefits from the technologies as much as their superstar peers," the report said.

Go deeper

Laurel Hubbard to become 1st openly trans athlete to compete at Olympics

New Zealand's Laurel Hubbard at the Gold Coast 2018 Commonwealth Games in Australia, when she became the first openly transgender athlete to represent NZ. Photo: Scott Barbour/Getty Images

The New Zealand Olympic Committee has announced that Laurel Hubbard has been selected for the women's weightlifting team for the Tokyo Games — making her the first openly transgender athlete to compete at the event.

The big picture: Hubbard, 43, is part of a five-member Kiwi weightlifting team and will compete in the women's super heavyweight category. Meanwhile, BMX rider Chelsea Wolfe will become the first openly trans athlete to travel to the Olympics with Team USA, when she arrives in Tokyo as a reserve rider.

American Airlines cuts hundreds of flights amid demand surge

Photo: Joe Raedle/Getty Images

American Airlines announced Sunday that it's cutting some 950 flights from its schedule, including 296 this weekend, to reduce potential pressure on its operations, the Wall Street Journal first reported.

Driving the news: The U.S. vaccine rollout has led to a massive increase in travel bookings. The airline noted in an emailed statement that it's facing an "incredibly quick ramp up of customer demand."

Updated 4 hours ago - Politics & Policy

Florida Pride parade fatal crash a "tragic accident," police say

Participants walk away as police investigate the scene where a pickup truck drove into a crowd of people at a Pride parade in Wilton Manors, Florida, on Saturday. Photo: Jason Koerner/Getty Images

Police said Sunday they believe a driver unintentionally hit spectators at a weekend Pride parade in Wilton Manors, Florida, resulting in the death of one man and leaving another person hospitalized.

The latest: Addressing speculation that the crash may have been a hate crime against the LGBTQ community, Wilton Manors police chief Gary Blocker said in a statement: "Today we know yesterday's incident was a tragic accident, and not a criminal act directed at anyone, or any group of individuals."

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