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Illustration: Rebecca Zisser/Axios

Artificial intelligence is a much-discussed buzzword in boardrooms around the world, but a lot of companies are still keeping it at arm's length, fearful that it's too complex and won't pay off fast enough, according to McKinsey Global Institute, a think tank.

Why it matters: In a study released today, McKinsey ferrets out 400 practical current use cases for AI that it says could be worth $3.5 trillion a year in savings and sales.

The background: The backdrop to the MGI study is the workhorse of the industrial age: the steam engine. Businesses in the 1700s, using animals, wind and water for power, did not immediately switch to steam, despite its obvious superiority. The transformation took more than a century, says Carl Frey, director of the Technology and Employment program at Oxford University.

Similarly, McKinsey's Michael Chui, the study's main author, tells Axios that the adoption of AI in the 21st century economy could take a long time. But he cites a lot of non-exotic ways that businesses can lucratively incorporate AI now. Examples are:

  • Forecasting airport congestion and bad weather to reduce costly flight cancellations for airlines.
  • Optimizing cargo routes to reduce fuel costs for product delivery.
  • Better understanding customers to offer more services and increase sales.

But, but, but: If history is a teacher, it is still not clear that companies — even presented with the McKinsey map — will respond quickly. This is because even basic AI can't simply be plugged in and used. A company must have already established a digitized eco-system into which the AI will be integrated, Chui said.

  • A warning about how long adoption may take: the authors themselves note that neural networks — the AI technique at the heart of the report — have been studied "since the 1940s," about three quarters of a century.

Go deeper

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Jerusalem crisis: Hamas fires rockets, Israel begins military campaign

Palestinian protesters and an Israeli police officer near the Damascus Gate. Photo: Amir Levy/Getty Images

Days of tensions in Jerusalem escalated into an exchange of fire on Monday, as Hamas fired dozens of rockets toward Israel and the Israeli military responded with strikes of its own and said it was preparing for a military operation that could last several days.

Why it matters: This is the first time Hamas has fired rockets at Jerusalem since 2014, and the most serious escalation between the Israelis and Palestinians in many months. It comes during the most sensitive days on the calendar — the last days of Ramadan and the Jerusalem Day commemoration on Monday — and amid political crises in both countries.

Colonial Pipeline aims to be "substantially" back online by end of week

Photo: Luke Sharrett/Bloomberg via Getty Images

The FBI confirmed in a statement Monday that a professional cybercriminal group called DarkSide was responsible for a ransomware attack on the Colonial Pipeline network, which provides roughly 45% of the fuel used on the East Coast.

The latest: President Biden said at a press briefing that there is no evidence so far to indicate that Russia was involved in the attack, although he plans to meet with Russian President Vladimir Putin soon. Officials previously said no countries are being blamed for the attack.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios