Article

AI Predictions for 2025

Name: Implement Consulting Group
Price range: $

– A probabilistic look

Published

14 January 2025

Predicting AI developments in 2025 is a challenge, as the most important thing to know is that we really do not know what is going to happen. I have therefore decided – as the old data scientist that I am – to express my predictions in raw probabilities.

Due to this uncertainty, few predictions will exceed a 50% likelihood. These forecasts represent the most probable scenarios in a rapidly evolving landscape. And sometimes, they showcase the opposite, allowing us to highlight myths that are worth calling out for how unlikely they truly are.

Here’s how the predictions are structured: I provide a headline summarising each prediction, a probability, and a brief explanation of the reasoning. For numeric predictions, I use ranges (e.g., [20-30%]), reflecting 90% confidence intervals.

Prediction #1

A major new frontier model will be released

Prediction: A major new model will be released, similar in purpose to GPT-4, but universally better in most aspects. We will almost certainly (99%) see "better" models, but there is a 30% probability that all of 2025 will be spend largely moving efforts around. One model might be better at reasoning and score higher on benchmarks but be so slow and expensive that it is not worth it for everyday tasks. Again: Progress is almost certain (99%!) but near-universal progress is not.

Probability: 70%

Reason: Maybe we are hitting a wall, maybe we do not need progress according to the labs. Maybe it is worth taking a different approach to progress for a year. Who knows? But the industry should brace for the very real possibility that we will not see a major universal breakthrough in 2025.

Prediction #2

Massive per-token price drops for equivalent intelligence

Prediction: Token prices for the same level of intelligence will fall dramatically.

Probability: YoY price for the same token will drop by 80-97%

Reason: This is essentially a continuation of history (97%) or possibly with some drop-off (80%). A pretty safe prediction, if I am being honest.

Prediction #3

Frontier model costs will increase

Prediction: New frontier models will cost a lot more than today’s most advanced models.

Probability: The most expensive tokens will be 10x current top prices.

Reason: I wanted to say 1-10x, but let's be bold and go for 10x. O1 is currently 15/60 USD per million input/output tokens, i.e., I am predicting a model priced at 150/600 USD.

General note: The first three predictions are what I would largely consider semi-permanent industry trends. This is basically a continuation of the world we have seen in 2023 and 2024, and we should expect to see in 2026 and 2027, too. Fun fact: Logically, this means that in around 2027, we might see models costing as much as 60.000 USD per million output tokens, or 60 USD for one page worth of content. This is likely an extreme but not unthinkable scenario, if intelligence progress continues.

Also note that it means current prices of something like GPT-4o will drop to 0,1 USD per million output tokens in 2027. In other words, current intelligence will be virtually free.

Prediction #4

The AI service boom

Prediction: There will be a 30x increase in companies pitching AI products.

Probability: 80%

Reason: 2025 will be the year of the AI product, with a massive wave of B2B-focused services emerging. 2024 saw a lot of obvious use cases like chatbots and basic internal solutions. The volume but also – and crucially – the quality of the startups is going to be very different in 2025. Similarly, enterprises like Microsoft, Salesforce, and SAP will also greatly mature their offerings. To be super clear: There is going to be a lot of noise in this space, but very importantly also a lot of diamonds in the dust. Procurement of AI is going to be big, complex, and a huge source of value. (Bonus prediction: This will continue into 2026, too. The noise from people trying to sell you AI products is going to increase massively)

Prediction #5

AI startups will dominate global VC funding

Prediction: 50-80% of globally funded startups in 2025 will be AI-focused.

Reason: AI will dominate venture capital markets. However, Europe will lag behind, with AI startups accounting for roughly half the global proportion. This is another almost free lunch when looking at Y Combinator batches, but it is worth mentioning here because the impact on business life will be profound.

Prediction #6

No game-changing breakthroughs

Prediction: There will be no sudden revolutionary leaps in AI capabilities.

Probability: 85%

Reason: Progress will remain steady, but no major breakthroughs in planning, reasoning, or long-term task management will emerge. While niche modalities may develop, we will not see game-changing capabilities like robotics models or transformative advancements in AI’s ability to handle complex tasks yet. That said, I'm 85% sure... So, I can’t help but think a lot about that 15% likelihood of a game-changer.

Prediction #7

Saturation of known benchmarks

Prediction: All current benchmarks, such as MMLU, will be saturated in 2025.

Probability: 75%

Reason: AI capabilities will continue to grow, effectively solving current benchmarks. While there may still be lingering questions, these benchmarks will no longer challenge or meaningfully differentiate models.

Prediction #8

Saturation of benchmarks will stunt AI development

Prediction: Saturation of benchmarks will hinder AI development, and some model makers will make public calls for better benchmarks.

Probability: 50%

Reason: Without clear evaluation criteria, the AI landscape will become increasingly confusing for customers, with competing claims about model superiority. This lack of clarity will slow model progress and prompt public calls for improved benchmarking standards. We might even see industry darling Hugging Face face some backlash for their enthusiasm about open source models doing well on common benchmarks only to fall massively short in real-world use.

Prediction #9

Private benchmarks will begin to emerge

Prediction: Some businesses will develop private benchmarks to evaluate models for proprietary tasks.

Probability: 20%

Reason: With benchmark saturation, businesses in certain industries will need private metrics to assess models’ suitability for their specific needs. This trend will spark debate over whether to keep benchmarks private (to protect incumbents) or make them public to incentivise innovation.

Note: I have a detailed write-up on this coming up, so stay tuned! I believe benchmarking to be a pivotal part of the near-term future of AI, and we will be talking a lot more about them in 2025.

Prediction #10

The emergence of second-generation applications

Prediction: Second-generation AI use cases will define much of 2025.

Probability: 75%

Reason: While vague, second-generation applications will likely center around purpose-built systems, including broad categories of "AI agents" that automate workflows, interact with systems, or perform as basic employees. This is going to be hell to evaluate in 2025, but let's see how it plays out. If it is still all just RAGs and ChatGPT clones, I will definitely rest my case.

Prediction #11

Creative AI goes mainstream

Prediction: Generative AI will become mainstream in social media and content creation.

Probability: 80%

Reason: Social media platforms will increasingly feature AI-generated content, which will largely be accepted – even celebrated – by users.

Sub-prediction: A fully AI-generated song will reach the Spotify Top 10.

Probability: 10%

Reason: While unlikely, this reflects the growing capabilities of generative AI in music and entertainment.

Final thoughts

The progress we are about to witness in 2025 will likely seem remarkable in isolation, if we could pretend we had not already seen remarkable changes in 2023 and 2024. Intelligence will increase and prices will fall at rates that could independently drive innovation in our field for years. But it will feel stagnant, because we have gotten used to acceleration.

The main change will be the massive onslaught of AI, especially in B2B but also in B2C services. We have had about two years’ worth of time with this technology. If history is any guide, the first movers should exit development just about now. So, get ready for a million sales pitches and make sure your sourcing and selection team is ready.

The good news: While it is going to be terribly stressful for all the CIOs out there, many of these products are honestly going to be pretty awesome. There will be A LOT of value to be generated and opportunities to explore in 2025.