By Sophia Velastegui: C200 member, Former Microsoft Chief AI Technology Officer and General Manager, AI Product; AI advisor for the National Science Foundation; formerly at tech giants Google/Alphabet & Apple; Board Director at Blackline (NASDAQ). Read more on LinkedIn.
The tech industry is relentless in pushing the boundaries of innovation, and 2024 was no exception—especially in AI advances. This year saw an accelerated pace of advancements as established giants like Google and Microsoft competed for market share against smaller, agile, and highly-disruptive start-ups. Several key trends emerged in 2024, laying the groundwork for 2025 and beyond. These advancements are reshaping how we create value, boost efficiency, and redefine the way we live and work.
Here are my top trends for the year and how they may predict our AI future:
Consumer Usage Soared…While Business Usage Lagged
Nearly a third of Americans have explored generative AI tools, marking a consumer adoption rate that outpaces the acceptance rate of PCs or the internet. Platforms like ChatGPT are leading the charge, with users sending over 1 billion messages daily. The widespread appeal is fueled by free and low-cost options, with OpenAI’s ChatGPT, Google’s Gemini, and Anthropic’s Claude.AI emerging as the go-to solutions for experimentation and everyday use.
While some of those people are integrating AI into their work, business uptake remains much slower with only around 6% of companies leveraging AI to produce goods or services. This marks a modest increase from the 3.7% reported in 2023 but still trails behind the enthusiasm of early adopter employees. The cautious pace stems from concerns about the rapidly evolving AI landscape, as well as challenges related to security, regulatory compliance, and the organizational restructuring required to support these new technologies.
Businesses Who Have Taken the AI Leap are Reaping the Benefits
The clear advantage in productivity is making a compelling case for fully adopting AI. Beyond boosting productivity, companies are leveraging AI to enhance customer engagement, drive topline growth, manage costs, and innovate products and services. As Satya Nadella, CEO of Microsoft, puts it: “It’s not about technology for technology’s sake; it’s about translating it into real outcomes.”
To realize the full ROI, companies are exploring more advanced AI solutions, customizing their tools to meet the unique needs of their business models. The ripple effects are being seen across industries, with adoption and perceived value highest in financial services, media, mobility, retail, energy, manufacturing, healthcare and education. For every dollar invested in generative AI, the average return is $3.70 for every dollar invested, so industries are jumping at the chance to realize significant earnings and drive innovation forward. As Fei-Fei Li, Co-Director of the Stanford Human-Centered AI Institute, emphasizes, “AI will impact every industry on Earth, from manufacturing and agriculture to healthcare and beyond.”
Ethics and Regulation Help To Ensure Responsible AI
The EU often provides a blueprint for the US on regulatory and privacy concerns when it comes to the tech industry. When the EU’s AI Act was established in August this year, it introduced a comprehensive AI governance framework that may point the way forward for the rest of the world. As Margrethe Vestager, Executive Vice President for a Europe Fit for the Digital Age, highlighted, “The European approach to technology puts people first and ensures that everyone’s rights are preserved. With the AI Act, the EU has taken an important step to ensure that AI technology uptake respects EU rules in Europe.”
The risk of AI being exploited by malicious actors or manipulated for unethical purposes is a pressing concern. The industry will be under the microscope, with government focus on how AI is developed, deployed, and sustained. That scrutiny will lend itself to future policies that will seek to enhance transparency, accountability, accuracy to minimize negative societal impacts.
Multimodal AI Makes Strides, Empowering Consumers with Creative Tools
In early 2024, tech companies began showcasing their advancements in multimodal AI capabilities. “Multimodal AI represents a significant leap forward, enabling models to process and generate content across text, images, and audio, thereby enhancing their applicability across diverse domains,” explains Sam Altman, CEO of OpenAI. And in the last few days of the year, Open AI officially launched Sora, enabling ChatGPT subscribers to generate longer form videos and animations.
The potential for multimodal AI will shift how we communicate on and offline, enabling everyday users to create high-quality visuals but also threatening creative professionals and opening new doors for misinformation. We’re still in the early days of this new development and it remains to be seen whether Sora dominates the market or another AI product swoops in to take its place.
Reasoning AI Models are the Next Frontier to Conquer
The rise of ChatGPT and its competitors was augmented by the ability of those tools to process huge troves of data and then predict what a user needed based on queries. OpenAI again is looking to be out in front with a new series of reasoning models, called o1, that it hopes will lead the way in “understanding” the outputs.
This technology is still in its infancy and demands significant resource investment, yet early reasoning models are rapidly improving in both capability and speed. “I think we are at an important moment for science and artificial intelligence (AI). In the last two or three years, we’ve seen AI tools become powerful enough and mature enough to tackle really important real-world problems,” notes Demis Hassabis, CEO of Google DeepMind.
Hyper-personalization of AI Tools Will Continue to Grow
Users are becoming more comfortable with generic copilots and looking to customize their experience even further. The prospect of fine-tuning AI agents for specific tasks, use cases, domain and industry is leading the industry to follow suit. Anthropic’s Claude assistant can now match a user’s unique writing style while Adobe’s Photoshop and Illustrator are adding new creative tools that will make anyone a graphic designer. Watch for other players to introduce more personalized user options.
Open-source AI Development Emerges as a Catalyst for Innovation
With the explosive growth and more sophisticated models, AI technology is ripe for democratization – meaning more opportunities for DIY AI building. ServiceNow’s open-source Fast LLM framework accelerates AI training up to 20x, which allows enterprises to build out unique AI solutions tailored to their needs. This approach promotes safer experimentation and learning while reducing associated risks.
On the other hand, Meta’s Llama 2 is taking a different approach to open-source AI initiatives, proving that not all players follow the proprietary paths of Microsoft or Google. Meta’s strategy aims to solidify its leadership status while empowering smaller organizations to leverage its generative AI technology. However, critics emphasize the need to strike a balance—promoting an open and inclusive AI ecosystem while implementing robust frameworks to address significant concerns, such as potential misuse, accuracy issues, and a lack of transparency.
A year feels like a lifetime when considering the rapid pace of AI advancements. By this time next year, an entirely new set of issues and trends may dominate the conversation. Keep an eye on how legacy tech giants and agile start-ups tackle these business challenges, and how the incoming presidential administration shapes the future of AI governance. If 2024 felt like a whirlwind of change, 2025 promises to take it to the next level!
