#239: Predictions 2025
How will (the rest of) 2025 pan out? Some thoughts... including AI, Drones, Crypto, Robots, China, Ageing, Energy, Brains, Climate Chaos, Fusion, and Life Extension. All in here.
2025 is going to be a wild ride. The technical term is batshit crazy.
I’m glad I waited till the end of Jan for this set of predictions because at least some of the drivers of the chaos are more visible to me now. Smarter people will probably have twigged on to this earlier. For example Tyler Cohen wrote this piece about the shift in US politics in July 2024, which I think is very prescient. Also many parts of Yuval Harari’s Nexus also seems extremely coherent for the world today.
As always, instead of a straight list of predictions, I try to think about the world in terms of probabilities, so I often classify them as things that will happen, things that could happen, and things that won’t happen, and often, some in-between categories.
What Will Happen: Alternative intelligence
This is such a big topic that it needs a separate category to itself. Yes, I believe that AI is as key a technology as the Internet, and in retrospect we’ll see it as being as transformative as electricity and steam. What will 2025 bring for AI?
SDLC: We’ll see AI redefining how software is built. Across the range of the SDLC (Software Development Lifecycle), AI will change requirements, coding, testing, release management, and support. Any developer worth his or her salt already uses AI extensively. Google announced this year that 25% of all code released over a quarter was written by AI. Expect this to grow significantly for most companies. Consequently there will be a mini-crisis for software developers. Some will elevate to AI experts, some will be AI competent, some will find ancillary roles and some will leave the profession. I expect to see a much lower intake across the board in almost every tech firm. So the real panic might be in the crop of students currently planning on careers in software development. In fact, I would extend this to much of IT - in how we manage databases, infrastructure, legacy systems, and more.
Customer Experience: The second big area of AI impact will be on customer experience - this will be across the spectrum - from insights, to loyalty, retention, contact centres (especially contact centres), self serve on websites, omnichannel models. I believe that early mover businesses will start to explore structural changes. For example contact centres and omnichannel teams often work independently from each other but if both are using AI, it’s got to be the same AI, using the same data, and so why different org structures? I believe CCOs (Chief Customer Officers) will need to have an AI office in 2025.
Knowledge & Strategy: We don’t talk about Knowledge Management anymore. There have been moments over the past couple of decades where knowledge management has been the flavour of the month, usually tied into specific products, collaboration tools, databases, expert systems, and the like. But it should be clear that with AI, the ability to harness organisational knowledge will get a massive boost. Imagine an AI system in a pharma company that can look across it’s history of biochemical research, existing and past drugs, clinical trials, regulations, skills and competences of people, and external data about diseases, and make recommendations on areas for the company to focus on strategically, or to build new competences. I expect AI to become an important strategy and knowledge tool, and I wouldn’t be surprised if you get some AI products aimed specifically at this space.
Agents hype vs value gap: Expect to see agentic everything. The rebranding and rewiring of everything SAAS as agentic, or AaaS. Some of it will be real. A lot of it will be hype. In 6 months we’ll see a lot of articles about the limitations of agents, where NOT to use agents etc. Agentic AI is an excellent idea by the way. But it will have its own hype cycle. Many agentic programs will see scope creep and/or fail to deliver the ROI for their extensive investment and inflated expectations. At the more useful end of things, we will see examples of AI executing autonomously - including financial transactions with limits, but with real decision capability. Some people have even spoken of agent marketplaces.
GeoPolitics: The flavour of the month in January of 2025 is clearly DeepSeek. The Chinese Open Source model that has set the cat amongst the pigeons. It seems to perform better than OpenAI models, cost less, is truly open - i.e. publishes all it’s parameters, and most ironically comes from China. My friend Shefaly talks about Trust and Transformative Tech. This is going to be a key battleground between the so called leaders of the free world who are undergoing their own identity reframing. Taking sides will be the challenge of 2025. National AI strategies and policies will be at the forefront.
Weather: we’ll get better weather prediction and this will have knock on effects on transportation, retail, and other infrastructure, for the smarter providers.
PhD AI: the capability of AI systems will reach PhD level ability. It still won’t be AGI but in it’s specific areas of training, AI will be able to deliver PhD levels of intelligence and output.
What Else Will Happen in 2025?
The Energy Debate: AI companies will be friends with Nuclear Energy. Micro reactors will be tested. And as the Trump administration rolls back subsidies for EVs, it will test the bromance between Tech CEOs and Politics when it comes to views on renewables. EVs will take a hit globally if (when) the US subsidies are rolled back.
Bitcoin: Continued growth in 2025. Even as Meme Coins rise and crash around them, and the crypto industry rages unfettered, Bitcoin will continue to strengthen in 2025. Bitcoin’s biggest value seems to still be as a currency hedge, and given the rising geopolitical instability, I expect many global investors to use BitCoin as a bulwark against instability. The rest of crypto will have a rollercoaster year with retail investors at great risk of losing their shirts.
The Rise of Robots: I thought that last year would see a ‘chatGPT’ moment for Robots. I’m not sure now if there will ever be one such moment. But I do see the continuing adoption of robots especially in restaurants, warehouses, hospitals, airports, and many other specialised domains. Much like self driving cars, Robots will thrive in environments where the physical space and infrastructure is (a) specialised and (b) predictable and where the people working with the robots are themselves experts.
Brain Computer Interface: having had some initial success with patients who can now play chess or design using CAD systems by just thinking about things, we should expect to see a higher level of interest in Brain Computer Interfaces. It will still be restricted to medical applications, than an optional use, but we will see this becoming more commonly referenced, with more neurological conditions being addressed.
AI Movie: we’ll see the early examples of mainstream movies where all actors, or all the major actors are AI generated. Perhaps the script will also be an AI output. This will create it’s own set of ethical debates. We might see the emergence of an AI ‘star’ with persistence beyond a single movie or series.
What Could Happen?
Here are some things that are also in the realm of possibility:
Civilian Drones: the last 2 significant wars in the Middle East and Ukraine have seen the extensive deployment of UAVs and drones, for highly precise strikes, espionage, reconnaissance, and as deterrents. The evolution of capability and sophistication of use, as well as the widespread use (which should bring cost of development and manufacture down) should see drones being used outside of military use much more frequently. As with a lot of tech that starts with military and ends up in civilian use, it might be the time for drones. Will it be last mile delivery? Emergency services? Disaster relief? Or surveillance and security? May be all of these. But the time might have come for drones.
Data Driven Healthcare: the steady creep of technology, wearables, portables, and data in healthcare will grow, and better models for managing data will evolve. The philosophy of allowing patients to manage their own data requires tooling that actually make this possible in very simple ways. This doesn’t currently exist. Perhaps private players will target more affluent patients with health data lockers. A business that Google exited some 15 years ago - probably too early then. Although it does have a Health Connect service on Android phones. Expect Google and Apple to battle for this market.
China Rebalancing: I believe that we could see a shift in global alignment with the US choosing to abdicate its leadership position in international forums ranging from the Paris Agreement, to the WHO, and even NATO. Which may provide an opportunity for China to play a bigger role. DeepSeek is just the technical end of this but we might see China stepping up in other ways - it already has a lead in EVs, may position itself as a green energy leader.
AI Disaster: We could see a significant AI driven disaster this year. Something that creates an adverse effect on many people either because a system that is run by AI is hacked or goes rogue. Or indeed it could be bad actors using AI for nefarious purposes. Very little critical infrastructure is currently managed by AI.
Climate Chaos. After the events in Germany and Spain over the past couple of years, and the California fires this year, I would expect that we’ll have more climate chaos next year. We just don’t know when and where. But clearly we’re not doing enough to prevent these extreme events from happening. And in fact we might be fanning the proverbial flames.
Brain Drain: given the strong views, and the muscular policies being adopted in the US, there could be a significant brain drain involving people who find themselves at risk.
There are many themes that will also keep playing out and you won’t see a major milestone. AI will infiltrate products, payments technology will keep getting slicker. Cybersecurity tech and bad actors will play cat and mouse. Quantum cryptography will get closer.
Things that Should Happen But Probably Won’t
Retiring the Labour Productivity debate: There is a long running discussion on productivity and whether technology is actually increasing productivity. The reality is that the way emerging technology works, a lot of is is really designed to improve capital productivity rather than labour. But we keep debating labour productivity.
Wealth Distribution: On the other hand, the extreme inequality and wealth distribution suggests that the current means of resource allocation i.e. the joint stock company system is being gamed. Decisions are still largely made to favour the shareholder, and with the emergence of AI, this will only accelerate. We need a better model for resource and wealth distribution, or it’s UBI for everybody in future.
Focus on Ageing: The world is ageing. This is a ticking time-bomb. But just like the environment, we all see the problem coming for decades, but aren’t doing enough about it, until it becomes a full-blown crisis. Currently 12% of the population is 65+ but only 10% of global GDP goes on health care. And that figure doesn’t include social care, or take into account the financial impact of pensions shortfalls.
VAR Improvements: Video Assistant referees have divided the football world in the UK. Much of it is a case study on how not to adopt technology. Despite the use of technology, humans are still the fallible part of the system. Expect the arguments to continue this year with no real progress.
Education: With the dramatic shifts in so many parts of our lives, you would think that education is also changing - not just how we teach but what we teach. Will we see the return of philosophy, the study of human intelligence? A curriculum aimed at the ‘why’ and not just the ‘how’. I don’t see this happening just yet, though
Fusion: the answer to all our energy problems. Some of the smartest people in the world are trying to get us there. Tokamak Energy, Helion (Sam Altman backed), and others. It would be great if we got to any kind of usable fusion. Unlikely in the next 12 months.
Life Extension: Yet another pet project of almost every multi-billionaire, from Bezos to Musk to Altman. Significant Life extension sometimes feels just around the corner, and at others it feels just scientifically impossible. Altman’s Retro and Altos, backed by Bezos are just 2 companies working on this. Would be nice if they could come up with something miraculous. Unlikely though.
So there you have it, my thoughts, wishes, and expectations for 2025.
Meanwhile Here’s Some Reading From the Week:
UK AI: The Government’s Strategy for AI along with the 50 point Action Plan. (Gov UK)
WEF Risk Report: The World Economic Forum’s 2025 report on risks. (WEF)
Ageing: Thinking beyond chronological age is critical for how we think about societal ageing because years from birth is only a crude proxy for how we actually age along various parameters. You kind of knew that - but it’s always good to see research supporting it. (CEPR)
Experimentation: How can your business be better at experimentation? (HBR)
Worst in Class: You’ve all seen the cool stuff from CES. Here’s a list of the worst tech and devices from CES. And some of the names will surprise you!
See you soon, stay warm and stay dry.