The World Economic Forum has declared 2025 the ‘year of practicality for AI,’ as adoption shifts from experimentation to real world impact. A recent McKinsey report suggests AI-driven productivity gains could add trillions to the global economy – and the momentum is clear. The Arm AI Readiness Index shows that 82% of global business leaders are now adopting AI, with 80% allocating dedicated budgets.
AI is no longer limited to innovation labs. It’s transforming how businesses operate – from streamlining core processes to enabling breakthroughs in fields like health care, finance, energy and manufacturing.
From integration into business and operations to unlocking life-changing innovations, the opportunities are vast.
The industries being transformed by AI
Health care is seeing some of the most profound gains. AI is accelerating clinical trials by up to 50%, getting life-saving treatments to patients faster. Paired with wearable devices, AI is also empowering individuals to make better-informed health decisions.
Beyond health care, the ability of AI to speed up processes and create significant operational efficiencies across industries is already having a transformative impact. In the finance sector, AI models are more rapidly improving fraud detection and powering enhanced customer service.
AI’s ability to predict high demand is benefiting the energy, retail and telecommunications sectors. In the energy sector, AI is being used as part of smart grid management systems to balance energy loads on the grid, helping to mitigate the stress from peak demands to reduce disruptions and overall emissions.
In telecommunications, the ability of AI to predict demand means networks can be optimized to ensure that they still work during peak demands.
Meanwhile, in retail, AI helps to manage supply chains more effectively.
The combination of renewable energy and AI is expected to increase innovation across the energy sector, and offer significant improvements in the efficiency and sustainability of energy systems. It can enhance the effectiveness and efficiency of renewable energy sources, with AI algorithms adjusting the infrastructure to maximize energy capture – for example, in the tilt of solar panels or pitch of wind turbine blades. Energy storage solutions are also benefiting from AI through optimizing battery performance, which is crucial for balancing the intermittent nature of renewable energy sources.
In manufacturing, AI is being used to accelerate automation and improve quality control and safety. For example, the integration of AI into industrial IoT applications ensures that systems can respond to their environments, or any changes, in milliseconds. It also means that any tasks or workloads involving real-time processing, like predictive maintenance or environmental monitoring, are handled efficiently and quickly.
Finally, in education, AI can create personalized learning experiences for students. As noted in Arm’s Davos 2025 session with leading AI academic experts, this is already leading to improved educational outcomes for students.
AI on the inside
At Arm, we see AI as a foundational driver of productivity – not only for our partners, but within our own business. We’re using AI across the company to improve software development, assist in debugging, accelerate code writing, and enhance decision-making across operational workflows.
From engineering teams using AI tools to speed up development cycles, to business functions leveraging AI for data analysis and strategic planning, AI is helping us move faster, operate smarter, and innovate more efficiently. We view this internal adoption as essential to staying ahead in an industry where time-to-market and quality are critical.
Despite the opportunities, many businesses still face barriers. Leaders report challenges in scaling compute and storage to meet growing AI demands. Others cite a shortage of AI talent as a key constraint.
Overcoming these challenges – by investing in infrastructure and workforce skills – will be critical to unlocking AI’s full productivity potential.
And the payoff could be transformative – driving breakthroughs in productivity, sparking new industries, and delivering real economic and societal value on a global scale.
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