GlobalData’s Tech Predictions 2025 report

GlobalData estimates that the total AI market will be worth over $1 trillion by 2030, increasing by 35% from $134 million in 2024 to $180 million in 2025. Generative AI—which refers to self-learning algorithms that use existing data, such as text, audio, or images, to produce realistic new content—will be the fastest-growing segment. The projected growth will not come without its challenges. The sector will face short- to medium-term obstacles, including rising data center demand, increased hardware costs, and limited availability of graphic processing units (GPUs). Due to its wide-ranging benefits, many companies will build their own AI systems using small language models (SLMs), and agentic AI will be the next frontier of AI.

Environmental, social, and governance (ESG) factors are essential to consider when measuring the sustainability of a country or company. The increase in global ESG-related regulation implies that governments want businesses to take ESG risk more seriously. Pressure from the anti-ESG movement, which includes US politicians and investors will be a focus for next year. AI brings a new set of governance challenges related to ethics and data privacy that will likely catch out tech companies. Improved data quality may therefore pose challenges for businesses.

The AI chip industry is investing in new materials and designs to overcome the limitations of conventional silicon chips. As chip sizes shrink, companies like TSMC are pushing the boundaries with 1.6nm chips by 2026. Nvidia, dominating the market, will face increased competition as tech giants like Apple and OpenAI develop their own AI chips. This shift will lead to a decline in Nvidia's market share. Additionally, the semiconductor talent shortage will worsen in 2025, prompting companies to focus on in-house training and partnerships with educational institutions to address the issue. Collaboration with universities to recruit and upskill employees is crucial to meet the growing demand for AI chips. Countries like Japan, South Korea, Taiwan, and China will be particularly impacted by the skills shortage.

While AI companies push the boundaries of Moore’s law, governments are developing regulatory frameworks. The European Parliament has approved the EU AI Act, allowing the bill to be fully applicable (after its grace period) in August 2026. Rules on prohibited AI systems will come into effect in early 2025, with generative AI systems facing requirements by August 2025. The rest of the act comes into full effect by August 2027, giving firms just two years to comply. Despite the phased approach and grace period, industry experts have expressed concerns. These include a lack of understanding of the act, a shortage of AI skills, and the complexity of the act itself. While companies that have invested in responsible AI programs may have a head start, implementing continuous monitoring, algorithmic audits, and improved data quality will pose challenges for businesses.

President Trump's tariffs policy is aimed at reindustrialising the US and bringing back mid-wage mid-skilled labour that was 'lost' to offshoring during hyperglobalisation. Trump also hopes to use the tariffs as fiscal revenue to offset the proposed corporate tax cuts planned for 2026. Trump’s transactional approach to foreign policy will allow countries to negotiate for lower or no tariffs by either balancing the US' perceived 'unfair' trade position with a trading partner or promising change in non-trade related policies, like we are seeing in trade negotiations with Mexico and Canada regarding migration and fentanyl inflows into the US.

Current tariff policies risk leading to an all-out global trade war, as countries that fail to negotiate will retaliate with tariffs of their own, worsening inflationary pressures on the global economy. As seen by Trump's blank 10% tariff on all Chinese imports, the trade war with China will also continue for the short term at least. Beijing has retaliated with tariffs in industries that are least likely to negatively impact China's already struggling domestic demand. Beijing’s acceleration of fiscal stimulus to stabilise Chinese economic growth will be sufficient to offset a large portion of the prospective Trump shock through to 2026.

This report identifies the crucial themes that threaten to disrupt your business in 2025. Opportunities await those who can exploit the benefits of each theme. 

Access the full report: www.globaldata.com/store/report/tech-predictions-theme-analysis/.

The UK's R&D tax credit system has seen substantial changes in the last two years. The merged scheme launched in April 2024 now offers a flat 20% taxable credit on qualifying R&D expenditures for all companies. While this simplifies the process, many SMEs that once enjoyed more favourable conditions face diminished benefits unless they meet the "R&D intensive" threshold. These reforms could alter the innovation landscape, particularly for smaller businesses that drive a large share of R&D claims.