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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

CCP releases two jailed Canadians after Huawei CFO deal with DOJ

Photo: Sheldon Cooper/SOPA Images/LightRocket via Getty Images

Two Canadians imprisoned by the Chinese government for over 1,000 days have been released and are expected to arrive in Canada on Saturday, Prime Minister Justin Trudeau said Friday.

Why it matters: Their release comes hours after Huawei Technologies CFO Meng Wanzhou reached a deal with the U.S. Department of Justice that resolves the criminal charges against her and could pave the way for her to return to China.

Updated 7 hours ago - Politics & Policy

Arizona GOP's private recount of 2020 election confirms Biden's win

Contractors working on behalf of the GOP examine and recount 2020 ballots at Arizona Veterans Memorial Coliseum in Phoenix in May. Photo: Courtney Pedroza/Getty Images

In an odd coda to the 2020 election, private contractors conducting a GOP-commissioned recount in Arizona confirmed President Biden’s win in Maricopa County.

Why it matters: The unofficial, party-driven recount has been heavily covered on cable news as part of former President Trump's continued effort to sow doubt about the election result.

Del Rio bridge camp empty following Haitian migrant surge

A boy bathes himself in a jug of water inside a migrant camp at the U.S.-Mexico border on Sept. 21 in Del Rio, Texas. Photo: John Moore/Getty Images

The last migrants camping under the Del Rio International Bridge, which connects Texas and Mexico, departed on Friday, Homeland Security Secretary Alejandro Mayorkas announced during a White House press briefing.

Driving the news: Thousands of migrants, mostly from Haiti, had arrived to the makeshift camp after crossing the southern border seeking asylum. Roughly 1,800 migrants will now head to U.S. Customs and Border Protection processing centers.

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