February2024GlobalEnergy&MaterialsPracticeBeyondthehype:NewopportunitiesforgenAIinenergyandmaterialsGenerativeAIcancreateadditionalvaluefromotherformsofAIandanalytics—andtheenergyandmaterialssectorisuniquelywell-positionedtobenefitfromtheseadvancements.ThisarticleisacollaborativeeffortbyFilipeBarbosa,SoenkeLehmitz,JukkaMaksimainen,LapoMori,BryanRichardson,ErikRoth,HumayunTai,SapnaThakker,IanWells,andRodneyZemmel,representingviewsfromMcKinsey’sGlobalEnergy&MaterialsPractice.It’snearlyimpossibletoscrollthroughdailyheadlineswithoutencounteringcommentaryongenerativeAI(genAI)—thelatestfrontierofartificialintelligence.ItseemsasifeverySiliconValleypersonality,venturecapitalist,orcasualtechnologististalkingaboutChatGPTorBard,amongdozensofothersystems,andthepotentialthesetoolshavetounlockpossibilitiesfarbeyondimagination.Howcloselyshouldleaderspayattentiontothehype?Thisisn’tthefirsttimethattechnologypunditshavelinedupbehindthelatestbestthing.ShouldgenAIbedismissedasafad,orshouldleadersdoubledownonthelatesttoolsasthepanaceafortheirtechnicaltroubles?Theanswerislikelyneither.Ourresearchshowsthatorganizationsthatrelyoninnovation,dataanalysis,andprocessautomationstandtobenefitthemostfromgenAI.Withintheagricultural,chemical,energy,andmaterialssectors,manycompaniesarenowmovingbeyondstraightforwardusecasesandtakingincreasinglyinnovativeapproachestoadoptinggenAI,andestimatesshowthatanadditional$390billionto$550billionofvaluecanbecreatedintheyearstocome.HarnessingthepowerofgenAIGenAI’spotentialtoaccelerategrowthandreducecostscannotbeignored(exhibit).Thisisparticularlytruefortheenergyandmaterialsspace,whichreliesheavilyondataandanalyticsforinnovationandcomprisessectorsbuiltuponincreasinglynuancedandcomplicatedprocesses.Simplystated,genAIaddsintelligencetoanydata,whichcanthenbeusedtoinformdecisionmaking—potentiallyreducinglongprocessestoasinglequestion—anditenablesworkerstogainpreviouslyunknownExhibitGenerativeAIcouldcreateadditionalvaluepotentialabovewhatcouldbeunlockedbyotherAIandanalytics.McKinsey&CompanyAI’spotentialimpactontheglobaleconomy,$trillion1Updatedusecaseestimatesfrom“NotesfromtheAIfrontier:Applicationsandvalueofdeeplearning,”McKinseyGlobalInstitute,April17,2018.Source:“TheeconomicpotentialofgenerativeAI:Thenextproductivityfrontier,”McKinsey,June14,2023Advancedanalytics,traditionalmachinelearning,anddeeplearning1NewgenerativeAIusecasesTotalusecase–drivenpotentialAllworkerproductivityenabledbygenerativeAI,includinginusecasesTotalAIeconomicpotential11.0–17.713.6–22.117.1–25.62.6–4.46.1–7.9~15–40%incrementaleconomicimpact~35–70%incrementaleconomicimpact2Beyondthehype:NewopportunitiesforgenAIinenergyandmaterialsknowledgeorcapabilities.Withthisinmind,thegrowinglistofexcitingandnontrivialpotentialusecasesinmining,oilandgas,chemicals,agriculture,power,andmaterialsisamplereasonforleaderstoseriouslyconsidergenAI(seesidebar,“WhatisgenerativeAI,andwhyalltheexcitement?”).However,thispromisecanonlyberealizedifthereisaclearvisionofhowtoharnessthepowerofgenAI—andunderstandinghowtocutthroughthenoisecanbedifficult.IndustryplayerswillneedtotakeahardlookathowgenAIfitswithintheircurrentdigitalstrategies.Thisincludeswhethertheorganizationhasthedigitalcapabilitiestoenablethesetechnologies,whethertorolloutcommoditizedsolutionsastheybecomeavailable,orwhethertodesignsomethingto...