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Batten down the hatches: the next year in business tech is set to be full of disruption, be it American politics, the arrival of AI agents or quantum confusion.
To help you prep – mentally, if nothing else – here are eight business tech predictions for 2025, alongside insight from industry experts.
AI is here to stay, but don’t expect everyone to be excited about it. Rising costs – we’ll get to that below – and not enough utility yet means frustration will continue to grow at the promises made by AI developers. That doesn’t mean the technology is a bust, it merely means it was over hyped and now it needs to settle down.
It’s the usual pattern of the Gartner hype cycle: this year we reached (hopefully) the “peak of inflated expectations” and now we’re sliding into the “trough of disillusionment”, but that means the “slope of enlightenment” will soon carry us to the “plateau of productivity”.
Well, some of us. AI won’t be useful for all industries, so expect take-up and backlash to be unevenly distributed with some sectors loving AI and others left wondering what the fuss is all about – and the downsides are going to start to become increasingly apparent.
“We’re beginning to see the cracks in the ‘magic’ promised by large language models (LLMs); they are really good at some tasks, and seem to ‘dazzle’,” said Craig Martell, CTO at Cohesity.
“However, these models cannot think, reason, or adapt to evolving threats in the ways many anticipated and hallucinate at higher rates than users may expect. This gap could very well lead to an ‘AI winter,’ where overblown expectations cool investor and developer enthusiasm.”
The power to develop and use these massive AI models is straining our energy infrastructure – Microsoft CEO Satya Nadella signalled in an interview that chips were no longer a shortage holding back AI, but now the problem was power. This is a massive problem requiring heavy investment into grids and sustainable energy sources at a sensitive time for humanity, what with the whole climate crisis.
The Big Tech companies have blown apart their emissions targets – Ireland may well be about to do the same – and there’s concerns we may need to increase the use of fossil fuels as we await the building of nuclear power plants and wind farms to fuel data centres.
Pair that with the aforementioned backlash, and it’s clear some might start to wonder if AI is worth destroying the planet. Because of this, expect Big Tech companies to talk a lot about sustainability to burnish their tarnished green credentials, but also expect to hear about smaller models and alternative ways of building AI that are perhaps less damaging, as well as smarter ways to power and cool data centres.
“The power grid is bracing for an unprecedented challenge as AI data centers’ appetite for power threatens to overwhelm existing infrastructure,” said Nick Schweissguth, Director of Product and Commercial Enablement at LiquidStack.
“This energy crisis will spur action from both utility companies and data center operators. Utility companies will embark on massive infrastructure upgrades to meet surging demand, from advanced energy storage to smart grid solutions.
“Data centre operators will adopt a ‘follow the power’ strategy, extending and diversifying new build locations far beyond traditional locales.”
All that aside, 2025 is going to be the year of AI agents. That’s according to Sam Altman, CEO of OpenAI, and it’s undoubtedly going to be the year that AI developing companies try to make AI agents a thing.
It’ll work if agents prove to be of any use at all – and they likely will in some instances. AI has shown potential in coding, not replacing engineers by supporting them, but most other use cases are glorified chatbots, such as “triaging” emails and auto-responding to them.
An AI agent that could be trained to take over a dull, repetitive task with true automation would be a grand tool indeed, but it remains to be seen whether that will truly arrive in 2025 – or remain a promise unkept for years to come.
“AI agentic architectures were a top emerging technology for 2024, but they’re not ready yet – expect another two years before they have any chance of meeting inflated automation hopes,” read a report from Forrester.
“Meanwhile, agentic AI is all the rage as companies push genAI beyond basic tasks into more complex actions.”
All that AI is expensive. Expect more companies to follow the lead of Canva and Microsoft with price bumps that are pinned on the expanded utility of their products. But we didn’t ask for all these AI gubbins, and much of it isn’t necessarily useful to all.
The looming ascension of Donald Trump to his second presidency in the US could spell higher costs because of a trade war with China – you know, the lads that make stuff – with tariffs also threatened against everyone else, including Canada.
The same way a rising tide lifts all boats, expect rising costs to lift all budgets, and plan accordingly.
“IT leaders need to allocate significantly more budget to fund AI initiatives to remain competitive,” said Tobi Knaup, GM Cloud Native at Nutanix.
“AI is expensive, which will put pressure on the rest of IT to operate at maximum efficiency. AI can also be used as a tool to identify inefficiencies and automate labor-intensive processes, freeing up budget.”
What next for hybrid working? The campaign to end the working from home (WFH) dream via return to office (RTO) mandates won’t slow – after all, WFH-hater Elon Musk is now best friends with Trump, so government workers there should start planning their commutes. But this trend will continue to be unevenly applied, and that’s good news.
If you value office life, plenty of big corporations – Amazon included – are making it clear that’s what they want from their employees. Head into your interview with confidence knowing you and your future manager are on the same page. But for other companies that can’t match pay rates, flexibility is one way to entice talent.
After all, flexibility is the point: some people want to work from home, others love the office, and most want a bit of both. The more variety from companies, the more choice employees have.
“The mandatory return-to-office policies some companies are enforcing will disappear in 2025,” CEO of Betterworks Doug Dennerline told Forbes.
Google recently unveiled a quantum chip, dubbed Willow. That has reminded people of the existence of this long developing future of computing, and while it’ll be a good long time before quantum computing is ready to go, that hasn’t stopped security companies from stepping in to point out that the arrival of quantum will potentially break encryption.
And that’s true. The US National Institute for Standards and Technology (NIST) has warned companies to migrate to post-quantum encryption standards beginning now, so they’re ready whenever quantum becomes generally useful. That means security companies are standing ready to help your company make the shift – so expect to start hearing about this looming challenge this year.
While this does need addressing, it’s nothing to panic over – just as with the Millennium bug before it, Q-Day (as we’re calling it) merely needs careful planning and a bit of upfront work from your IT department in order to avoid chaos.
“Many of the fears expressed after the arrival of ChatGPT and the presence of AI in everyday life have not materialised like autonomous systems threatening human engagement and AI’s potential to brute force data encryption,” noted Brian Spanswick, CIO and CISO at Cohesity.
“This is not meant to downplay the impact that we’ve seen with the emergence of AI, this is meant to illustrate the significantly greater impact we are going to see from the advent of quantum computing. In 2025 organisations need to at least develop a plan to migrate to encryption that isn’t vulnerable to quantum computing attacks.”
The cloud costs a lot, so expect to start hearing more about a new business trend: cloud repatriation.
For example, 37 Signals – the SaaS company behind Basecamp – believes it will save $10 million over five years by ditching the cloud in favour of setting up its own hardware, while also having more flexible, responsive IT. IDC research suggested half of organisations spent more on cloud than expected last year, with six in ten predicting similar cost overruns for 2024, too. Despite that, the analyst firm predicted fewer than one in ten companies plan to fully repatriate their workloads to on-premise, but more will move specific workloads back in-house.
AWS told the Competitions and Markets Authority that it “faces competition from on-premises IT” and was losing customers to on-premises.
Expect regulatory chaos in 2025 – or at least the beginning of wild times in tech, given how slowly it all moves. European regulators will keep on keeping on when it comes to targeting Big Tech companies and their various missteps, with the AI Act coming into force this past August and the Data Act joining it in September next year. Beyond that, the EU Energy Efficiency Directive will require data about data centre power usage to be made public, which should make for some interesting reading as AI exacerbates energy demand.
But over in the US, the head of the FTC Lina Khan is departing ahead of Trump’s second go at being president – but not before her agency lobbed an information request running into the hundreds of pages at Microsoft over antitrust concerns. Google faces potential dismantling by the Department of Justice, and that could be exacerbated by a president angry at how he perceives tech companies have treated him – in a book, Trump threatened Meta’s Mark Zuckerberg with “life in prison” if Facebook meddled in the US election. How Elon Musk plays into all of this in his new position as Trump’s right-hand man remains to be seen.
Big Tech execs will be nervous about the new year; it’s no wonder Zuckerberg and Apple’s Tim Cook have run to Florida for meals with Trump.
Money talks. Alongside Zuckerberg, Amazon and OpenAI are expected to make donations worth $1 million to Trump’s inaugural fund.
