Evolution of artificial intelligence (AI) at Lighthouses FIGURE 19 Notes: 1. ROI calculation: total investment divided by total financial benefit (to date, at time of application). Source: Global Lighthouse Network. Overcoming the “GenAI paradox” by focusing on high-impact vertical applications Nearly eight in 10 companies have deployed GenAI in some form, yet about 80% report no significant impact on earnings – a phenomenon McKinsey calls the “GenAI paradox”.46 The gap stems from over-investing in horizontal applications and under- investing in vertical ones. Horizontal applications, such as chatbots, improve productivity but deliver incremental value. Vertical applications, by contrast, are function-specific and transformative: because they directly influence pricing, demand, risk and asset utilization, vertical applications are more likely to drive measurable revenue uplift, margin expansion and cost reduction than horizontal applications. However, vertical applications are harder to implement, as they require deep integration with existing systems and domain- specific data (Figure 20). Lighthouses are breaking through by focusing on high-impact vertical applications which, when assetized47 as enterprise capabilities, provide a competitive edge. For example, those competing on customization or speed to market, such as Haier in Shanghai, China and Eaton in Changzhou, China, deploy GenAI for idea generation, research curation and sales enablement. Rather than adding operational complexity, AI streamlines it, transforming data and design inputs into first- time-right prototypes that compress the time from ideation to industrialization (Figure 21). Global Lighthouse Network: Rewiring Operations for Resilience and Impact at Scale 31 In-house developed (%) Cost ($K) Speed to deploy (months) ROI 1 D evelopment approaches in 2025 A nalytical AI/MLGenAI AI agents680 370 22869% 71% 88%12 7 74.2 1.4 1.3 IAne G stnegA I A LM/IA lacitylan AAnalytical AI/ML and GenAI solutio ns, by Lighthouse cohort % of top solut ions presen ted for Lig hthouse designat ion 16%22% 20%30% 30%32%40%42%44%55%69% 69% 71% 60% 62%10% 22%23%% 3% 8 9% 1 2 3 4 5 6 7 8 9 0 1 1 1 2 1 3 1 4 1 5 1Sep ‘18 Jan ‘19 Jul ‘19 Jan ‘20 Sep ‘20 Mar ‘21 Sep ‘21 Mar ‘22 Oct ‘22 Jan ‘23 Dec ‘23 Oct ‘24 Dec ‘24 Sep ‘25 Dec ’25

Global Lighthouse Network 2026