GenAI in 2025: Revolutionizing Agencies and Reshaping Ecosystems
2025 Predictions is a series of special reports examining market trends and business changes TBR expects in the coming year for AI PCs, cloud market share, digital transformation, GenAI, ecosystems and alliances, and 6G.
Top Predictions for GenAI in 2025
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- GenAI will continue to revolutionize mission-critical functions and day-to-day operations at federal civilian, defense and intelligence agencies
- Cloud vendors will splurge on AI investments even as customers grow apprehensive
- Infrastructure vendors’ focus will shift from serving cloud companies to making a massive push in enterprise AI
- The energy problem is likely to slow the pace of AI market development significantly
- GenAI upends pyramids, even as enterprises slow their AI roll
The state of AI and GenAI in 2024
In 2024 the AI and generative AI (GenAI) landscape faced four key challenges: rising costs, driven by growing investments in data and infrastructure; talent and training gaps; regulatory uncertainty; and macroeconomic pressures. These obstacles will persist into 2025, with additional challenges in the GenAI space becoming increasingly evident.
According to TBR research, the waning GenAI hype has exposed underlying issues, including expensive cloud commitments and fragmented data strategies, creating opportunities for companies that emphasize ROI, complementary technologies and cost management. Adding to the complexity, rising energy costs and heightened awareness of GenAI-related security risks are further shaping this uncertain yet opportunity-filled environment.
But after two years of GenAI disruption, a clear trend is emerging across the ecosystem: strategic partnering is becoming essential. Companies such as McKinsey & Co, Wipro, Dell Technologies, Amazon Web Services (AWS) and NVIDIA are adopting this approach, recognizing that no single organization can deliver comprehensive GenAI-enabled solutions alone. Instead, success increasingly depends on leveraging the technology and expertise of ecosystem partners.
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