Uploaded June 2026 | Updated September 2026, 2 weeks ago
For decades, the bottleneck in software development remained the same: There was never enough engineering capacity to build everything.
AI is changing that equation, fast. Coding assistants have given way to autonomous agents that can spec, write, test, and deploy software with minimal human input, compressing timelines that once took weeks into days, even hours.
But the technology is moving faster than most organizations can absorb it. The companies seeing real gains aren’t the ones that handed developers a new tool; they’re the ones that have fully rethought the way software gets made.
Three McKinsey experts—Janaki Palaniappan, Martin Harrysson, and Matt Linderman—discuss what is actually changing on the ground, where the productivity gains are real versus illusory, and what leaders need to get right as AI takes on a growing number of software development tasks.
*Chapters:*
00:00 - Intro
00:28 - How is AI changing the day-to-day work of software engineers?
02:45 - Why are organizations struggling to turn productivity gains into value?
05:44 - How are software teams changing when AI is integrated in development?
07:48 - What skills are becoming obsolete for software engineers?
10:27 - Where do humans continue to add value as AI advances?
12:58 - How is AI changing the software development life cycle?
15:52 - How far are we from AI that can autonomously build and deploy software?
19:12 - What risks do companies face when incorporating AI in development?
Read the full explainer: mckinsey.com/featured-insights/mckinsey-explainers/ai-powered-software-development-how-technology-is-rewriting-the-rules
*Connect with us:*
Subscribe to our newsletters: mck.co/Subscribe
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For decades, the bottleneck in software development remained the same: There was never enough engineering capacity to build everything.
AI is changing that equation, fast. Coding assistants have given way to autonomous agents that can spec, write, test, and deploy software with minimal human input, compressing timelines that once took weeks into days, even hours.
But the technology is moving faster than most organizations can absorb it. The companies seeing real gains aren’t the ones that handed developers a new tool; they’re the ones that have fully rethought the way software gets made.
Three McKinsey experts—Janaki Palaniappan, Martin Harrysson, and Matt Linderman—discuss what is actually changing on the ground, where the productivity gains are real versus illusory, and what leaders need to get right as AI takes on a growing number of software development tasks.
*Chapters:*
00:00 - Intro
00:28 - How is AI changing the day-to-day work of software engineers?
02:45 - Why are organizations struggling to turn productivity gains into value?
05:44 - How are software teams changing when AI is integrated in development?
07:48 - What skills are becoming obsolete for software engineers?
10:27 - Where do humans continue to add value as AI advances?
12:58 - How is AI changing the software development life cycle?
15:52 - How far are we from AI that can autonomously build and deploy software?
19:12 - What risks do companies face when incorporating AI in development?
Read the full explainer: mckinsey.com/featured-insights/mckinsey-explainers/ai-powered-software-development-how-technology-is-rewriting-the-rules
*Connect with us:*
Subscribe to our newsletters: mck.co/Subscribe
Subscribe on YouTube: mck.co/YouTube
Facebook: mck.co/Facebook
Twitter: mck.co/Twitter
LinkedIn: mck.co/LinkedIn
Instagram: mck.co/Instagram
