Building competitive strategic moats with AI
Building competitive strategic moats with AI
Publish Date: 2026-05-15 03:00:00
Source Domain: www.mckinsey.com
“If everyone is special, then no one is.” That line, adapted from the movie The Incredibles, captures the essence of a key issue with AI today. While AI adoption has exploded (nearly nine in ten organizations now use AI in at least one business function), most companies are deploying the same large language models (LLMs) to improve productivity. If everyone has the same advantage, it’s not really an advantage.
This is a trap we’ve seen before. During the digital-transformation wave, companies rushed to develop websites and apps, but competitive advantage—the distinct set of hard-to-replicate assets and operating models a company creates that earns superior returns over time—didn’t automatically follow. Our analysis of the banking sector, for example, showed that companies increased mobile-app adoption between 2018 and 2022, but leaders didn’t extend their advantage over laggards. What widened the gap was integrating digital and AI into the entire customer journey to reduce friction, which fueled online sales and contributed to significant TSR outperformance.
The lesson: Apps and tools can be copied. Value comes from building advantages that are hard for competitors to replicate—that is, competitive moats. That’s a critical lesson to bear in mind as CEOs and boards consider how to capture their fair share of the enormous value just from generative AI that’s at stake.
To better focus that thinking, we identified moats—six strategies and three capabilities—that can provide a competitive advantage. These moats shouldn’t be particularly new to business leaders, but AI has shifted the dynamics in each of them. Understanding what that means is the path to leaping from AI as table stakes to AI as an abiding competitive advantage.
Strategic moats
While a strategic moat is difficult for others to replicate, it should also represent an area where the business already has an advantage. This view can help CEOs determine which area to focus on…
