McKinsey says 18 high-growth arenas added $18 trillion in market value from 2022 to 2025 and could generate $29 trillion-$48 trillion in revenue by 2040.
AI foundations - semiconductors, cloud and AI software - drove much of the surge, adding $10.8 trillion in market cap, while US-based firms account for about half of arena revenues.
Greater China remains strongest in electrification, Europe leads only in non-medical biotech, and Japan and South Korea have gained in robotics, modular construction and video games.
With China now leading in R&D investment and STEM talent, can the US maintain its tech dominance through capital alone?
As AI's energy demand soars, could a looming power crisis be the biggest threat to the projected $48 trillion tech boom?
The $29 Trillion Future Arenas: How US Dominance and China’s Rise Are Reshaping the Global Economy by 2040
Overview
The global economy is rapidly transforming through 18 high-growth future arenas projected to generate up to $48 trillion by 2040. U.S. companies dominate these sectors, holding 75% of market value and leading in 14 arenas, supported by deep capital markets, top AI talent, and strong links between technology and national security. China is rising in key areas like industrial electronics and electric vehicles, driven by state-led investment and industrial policy. Meanwhile, geopolitical tensions threaten supply chains, especially in semiconductors, prompting companies to pursue reshoring and innovation. This dynamic reshapes labor markets with AI-driven automation and fuels the rise of new innovation hubs, while economic power concentrates mainly in the U.S. and China, creating both opportunities and risks globally.