Productivity decline in 30% of companies using agentic AI: McKinsey report

The rapid adoption of agentic AI tools is not translating into higher productivity for every company. Productivity actually declined in nearly 30% of companies after teams started using autonomous AI systems, according to McKinsey's Technology Trends Outlook 2026.The report said companies can run into operational problems when they introduce these tools without changing how their development teams work. Agentic AI can automate parts of the software development process, but the resulting gains have varied across organisations."Without a systematic approach, agentic software development can lead to unintended outcomes," the report stated. "Our research finds that in 30 per cent of companies, productivity fell after teams began using agentic AI tools. Almost everyone, it seems, is 'vibe coding'—but that doesn't always lead to value."More code does not mean more productsMcKinsey said a rise in coding activity does not necessarily translate into more useful products or faster business growth."In one study, AI tools increased coding activity by 180 per cent, but shipped releases rose by only 30 per cent, showing that more code doesn't always lead to more products," the report added.The report also identified a trust problem among developers. Around 46% of developers globally said they actively distrust the accuracy of AI tools, compared with 33% who said they trust them. Only 3% said they highly trust AI-generated outputs."Developer acceptance of agentic software tools remains a meaningful constraint," the report noted. "Some 46 per cent of developers worldwide actively distrust AI tools' accuracy, compared with 33 per cent who trust them, and only 3 per cent highly trust their outputs. For companies that want to reap the benefits of agentic software development, that trust gap matters."Investment surges despite concernsBusinesses and investors are nevertheless putting increasing amounts of money into agentic AI.Equity investment in companies developing agentic software rose from negligible levels through 2023 to around $5 billion in 2025. It then crossed $61 billion in the first half of 2026, largely because of a $60 billion acquisition of Cursor.Job postings related to the technology also increased sharply, rising 221% between 2024 and 2025.AI boom brings wider challengesThe wider technology sector is also seeing a rapid increase in spending. Investment in AI infrastructure doubled in a year, while energy technologies attracted nearly $200 billion in investment during 2025 as companies sought to meet the growing power requirements of AI.McKinsey said the speed of adoption is creating challenges for organisations that are trying to deploy AI without established processes."This breakneck pace of change comes with challenges," the report added. "Organizations are racing to deploy AI at scale without any proven road maps. They have workforces that need upskilling, legacy systems that need updating, and networks exposed to ever-evolving security risks."Get the latest Business News and Live updates. Download the TOI app.