Technology Trends for 2025: AI Investment Will Decline Amid Growing Demand

By A Staff Reporter

As we look ahead to 2025, technology expert Biswajit Mohapatra, Principal Analyst at Forrester Research, predicts significant shifts in how organizations will approach investments in artificial intelligence (AI). Despite increasing demand for AI-driven solutions, Mohapatra forecasts that large enterprises will reduce their investments in General Artificial Intelligence (GenAI), opting for smaller, less risky projects instead.

In his latest analysis, Mohapatra pointed out that many organizations will face challenges in realizing positive returns on their AI investments by 2025. He noted that AI technology is still evolving, and its complex nature makes it difficult for businesses to achieve tangible financial returns in the short term. As such, companies will likely focus on lower-risk projects, such as customer service portals and chatbots, which have already shown promise in improving customer experiences and operational efficiency.

Moreover, Mohapatra highlighted that ethical concerns and regulatory issues surrounding data management will continue to pose significant obstacles to AI investment. Data privacy laws, ethical AI usage guidelines, and the challenges of managing vast amounts of data responsibly are complicating large-scale AI initiatives. These issues, coupled with the difficulty in quantifying return on investment (ROI) in AI, are causing enterprises to reassess their technology strategies.

From an investment perspective, Mohapatra predicts that the top 10 percent of IT service providers will increasingly integrate AI into around 30 percent of their services. This shift will lead to a move toward a fixed-cost model, where businesses will look to streamline operations using AI-powered solutions that deliver steady and predictable outcomes.

In the financial sector, Mohapatra foresees more partnerships between AI companies and financial institutions, driven by the potential of AI to enhance services. However, the insurance sector is expected to face more challenges in adopting AI, due to the complexity of underwriting and claims processes.

Finally, the banking sector is predicted to see significant strides in the adoption of autonomous money management technologies. By 2025, these AI-driven systems are expected to offer more personalized and efficient financial services, enabling customers to manage their finances with greater ease and accuracy.