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There's nothing new in AI in 2024 that matches the sheer “wow” factor of using ChatGPT for the first time, but rapid improvements in the underlying technology still keep the field going. For 2025, this is how I see things going.
Will the development of artificial intelligence hit a wall?
In 2025, this momentum will fade. Even some of the tech industry's biggest optimists have admitted in recent weeks that simply throwing more data and computing power into training larger AI models — which have been a reliable source of improvement in the past — is starting to pay off. Diminishing returns. In the long term, this deprives AI of a reliable source of improvement. However, at least in the next 12 months, other developments should replace the stagnation.
The most promising developments seem to come from models that perform a series of steps before returning an answer, allowing them to query their initial answers and refine them to provide more “rational” results. It's debatable whether this is truly comparable to human thinking, but systems like OpenAI's o3 still seem like the most interesting advance since the advent of AI-powered chatbots.
Google that He regained his AI magic Late in the year, after spending two years struggling to catch up with OpenAI, it also showed how new agent-like capabilities in AI can make life easier, such as tracking what you do in your browser and then offering to complete tasks for you. All of these demos and prototypes still need to be turned into useful products, but they at least show that there is more than enough in the labs to keep the AI hype going.
Will the “killer app” of artificial intelligence emerge?
For most people, the advent of generative AI has meant constantly seeing prompts offering to complete your writing or edit your photos in ways you hadn't thought of — tools that are unwanted, sometimes useful, but not enough to change your life.
Next year will likely bring the first demonstrations of apps that can intervene more directly: absorbing all your digital information and learning from your actions so they can act as virtual memory banks or take control of entire aspects of your life. But, concerned about the technology's unreliability, tech companies will be wary about rushing it out for mass use — and most users will be equally wary about trusting it.
Instead of real killer applications for AI, this means we will remain in the “AI in everything” world that technology users are already accustomed to: sometimes intrusive, sometimes useful, and still not delivering the truly new experiences that would prove the Age of Intelligence has arrived. Really artificial.
Will Nvidia GPUs still rule the world of technology?
The chipmaker's huge profits have made it a target for the most powerful technology companies, most of which are now designing their own artificial intelligence chips. But Nvidia has been moving too quickly relative to competitors, and while there may be a bumpy quarter or two as it goes through a major product transition, its Blackwell product cycles should carry it through the year comfortably.
This does not mean that others will not have successes. According to chip maker Broadcom, three of the largest technology companies are set to use their own in-house chip designs for supercomputing “clusters” of 1 million chips each in 2027. This is 10 times the size of Elon Musk's Colossus system, which is believed to be It is the largest set of AI chips currently in use.
Even as its market share begins to erode, Nvidia's software still represents a significant moat for its business, and by the end of the year it should be on the cusp of another significant new product cycle.
Will the AI boom in the stock market continue?
With major technology companies in the midst of an AI race that their leaders believe will determine the future shape of their industry, one of the main forces behind the AI capital spending boom will remain in place. Additionally, when some companies start claiming significant — if unproven — results from applying the technology in their own businesses, many other companies will feel they have to keep spending, even if they haven't yet figured out how to use AI productively.
Whether this is enough for investors to continue spending their money on AI is another matter. This will depend on other factors, such as the stock market's confidence in the deregulation and tax-cutting intentions of the new Trump administration and the Fed's willingness to continue to ease monetary policy.
All of this points to a very volatile year, with some big corrections along the way. But with enough liquidity, Wall Street may succumb to the AI hype for a while.
richard.waters@ft.com
