The race takes off in the next big arenas of competition

Extractive Summary of the Article | Listen

Entering 2026, record-breaking investment in semiconductors, cloud services, and AI software and services is poised to transform how global companies create value. This fast-growing “AI foundation” for business is accelerating the growth of digital ecosystems and enabling new physical-world applications, from space and robotics to drones and other forms of “physical AI” that sense, decide, and act in the real world. At the same time, novel weight-loss therapies are reshaping pharmaceutical pipelines, electrification is advancing steadily, and geopolitics is increasingly influencing how critical industries are built up and protected—particularly through technology sovereignty and supply chain resilience policies.

The McKinsey Global Institute previously identified 18 future arenas of competition—from AI services to space—that are increasingly writing the global growth story. Indeed, over the past three years, these 18 industries have grown roughly four times as fast as other industries in market cap and ten times as fast in revenue. Arenas are, by definition, the fastest-growing and most dynamic industries. As their scale and reach into the broader economy expand, it is fair to say that we are all in these arenas now.

Since 2022, an “AI foundation” set of industries—semiconductors, cloud services, and AI software—has added $500 billion in revenues and $11 trillion in market cap. Infrastructure demand and investment have escalated rapidly in anticipation of AI deployment orders of magnitude larger than today. Companies that design and deploy computing power at scale have so far accrued most of the increase in market value and profit.

Meanwhile, growth continues to surge in digital industries, while many physical arenas are poised to take off. Digital industries, such as e-commerce and digital advertising, are capturing a growing share of the attention economy, especially in emerging markets, even as chatbots reduce open-web traffic and agentic commerce creates new competitive fronts. Other arenas continue to escalate at varying paces, from robotaxis rolling out in dozens more cities worldwide to obesity drugs that are now six out of every 100 US prescriptions.

Nine large competitors—referred as “omniscalers”—are spending heavily and spanning multiple arenas. The nine omniscalers collectively generated over $700 billion in operating cash flow in 2025 and invested more than $800 billion in R&D and capital expenditures that same year. Their capabilities and financial capacity compound as they compete in arena after arena, expanding to generate revenues in as many as nine arenas.

Companies headquartered in the United States and the Greater China region account for 90 percent of arenas’ market value today. US companies lead in 14 of the 18 arenas in market cap and ten in revenues. But China is gaining ground, especially when measured by revenue shares. The rest of the world stands by—for now.

For companies competing in or anywhere near future arenas, blind spots may be widening. Traditional strategy tool kits are no longer adequate, and the risks and rewards of getting it right are ever increasing.  For any CEO, the central question is whether exposure to arenas will improve the fundamental drivers of value in the business: returns on invested capital and growth. The authors generally see four foundations that underpin long-term value creation from strategy; they are ROIC and growth as the financial drivers, managing for the long term, market attractiveness, and competitive advantage.   The opportunities and demands of arenas intersect with all four.

show less