AI in 2025: Realistic Predictions That Could Shape the Future

Wamiq Raza

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3 min read

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Jan 2, 2025

As we step into 2025, AI advancements continue to spark excitement and debate. Based on current trends and challenges, here are my predictions for how AI will evolve over the next year. Let’s dive in:

1. The Scaling Law Will Remain a Dominant Force

The scaling law, which governs the relationship between compute power and model performance, will remain strong.

Why This Matters:

• Demand for Synthetic Data: Reasoning models require immense amounts of synthetic data for training. This means compute demand will skyrocket, both for generating data and for training the models themselves.
• Larger Pretraining Models: Bigger models will be crucial in evaluating reasoning models and generating the necessary data. This symbiotic relationship will push compute resources to their limits.

Expect ongoing innovation in post-training and inference-time optimizations to manage these challenges.

2. Infinite Memory Won’t Be Native to LLMs

Contrary to popular belief, large language models (LLMs) won’t inherently have infinite memory. Instead, their capabilities will rely on sophisticated memory systems.

Key Points:

• Long-Term Memory Systems: Models will depend on external systems for storing and retrieving relevant context, making infinite memory unnecessary.
• No Infinite Context Windows: Context windows will expand but remain finite, highlighting the importance of efficient memory retrieval systems.

This evolution will make LLMs more resource-efficient and practical for real-world applications.

3. Small Models Will Thrive in Agentic Systems

While large models dominate headlines, small models will emerge as the backbone of agentic systems.

Why Small Models?

• Task-Specific Optimization: With proper tuning, small models can plan and execute specific tasks.
• Reduced Latency: Smaller models ensure faster generation times for complex workflows involving many steps.
• Cost Efficiency: Token-based pricing for large models can hinder adoption in cost-sensitive scenarios. Small models offer a more affordable alternative.

This shift will democratize AI adoption across industries.

4. Enterprise AI Systems Will Make Gradual Progress

AI in the enterprise remains a challenging frontier. While new systems will emerge, they won’t achieve mainstream adoption by the end of 2025.

The Challenges:

• Security Concerns: Enterprises need airtight security for sensitive data.
• Integration Hurdles: Seamlessly connecting AI systems with existing infrastructure is no small feat.
• High Accuracy Requirements: Businesses demand reliable outputs to avoid costly errors.
• Observability: Monitoring AI performance is essential but complex.

Startups focused on AI infrastructure will play a vital role in addressing these pain points.

5. Autonomous Agents Will Still Be in Development

Fully autonomous agents won’t be production-ready by the end of 2025. Instead, we’ll continue to see advancements in assistant-based systems that augment human workflows.

What This Means:

• Human-AI Collaboration: Assistants will enhance productivity rather than replace jobs.
• Marketing vs. Reality: While autonomous agents will be heavily marketed, their real-world utility will remain limited.

Expect a continued emphasis on augmentative AI over fully autonomous solutions.

Conclusion

AI in 2025 will be defined by incremental progress, practical solutions, and a focus on making technology accessible and efficient. From scaling computing to optimizing small models and addressing enterprise challenges, these trends highlight the nuanced reality of AI’s evolution.

What are your thoughts on these predictions? Let me know in the comments below!

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