Technology trends for 2025: AI and beyond

Editor’s note: This is the third installment of an annual 4-part series on the trends impacting small and midsize businesses. Here, we study technology trends for 2025.

While artificial intelligence dominated the business news in 2024, it was mostly large tech that capitalized on the feeding frenzy. In the first half of 2024, the “Magnificent Seven” contributed to more than half of the increase in the S&P 500.

One recent study revealed that only about 10% of companies are using AI in any material way while 51% are “experimenting and beta testing.” Most companies are only using AI to enable modest improvements in their back-end operations.

Contribution of Magnificent Seven to S&P

Source: Capital IQ

In 2025 and beyond, transformational innovations will shape the business landscape:

• According to Gartner, IT spending swelled 7.5% in 2024 as companies absorb an “AI tax” by investing more in artificial intelligence.
• Providers specialize in industry-specific cloud solutions.
• Instead of replacing humans with AI, short-staffed companies will utilize it to augment roles that have typically been filled by humans.
• AI as a service, especially through the adoption of workflows, provides a plug-and-play utility. Bots and other tools act like “agents,” making decisions and then taking action.
• Coupled with accelerated computing, AI will materially improve service levels. AI can instantly understand your preferences and utilize data to solve problems. AI is amplifying hyper-personalization. Products are being built so that customers can self-configure.
• AI will be used extensively in health care, both to provide access and accelerate care.
• Companies will be deploying pre-configured GPTs from the Open AI store and building custom GPTs to solve specific problems. Custom GPTs will make some software-as-a-service (SaaS) solutions obsolete.
• 2025 will mark a year in which AI combines with IoT (Internet of Things) to enable an entirely new era of smart devices that defy our imagination.
• Quantum computing enables more advanced drug discovery, climate modeling and supply chain management. While Quantum may be dominated by large providers such as IBM, it will enable many of the innovations below.
• Mexico is emerging as a technology outsourcing hub. 

More in this series

Ecological trends for 2025 and beyond

Social and workplace trends for 2025 and beyond

2025: The year AI drives customer-centricity

As we consider our journey in using AI, our economy will move from large language models (LLMs) to applications and workflows that vastly improve the customer experience. Businesses will harness AI to anticipate needs, personalize interactions and provide proactive support.

From chatbots offering real-time assistance to advanced analytics that understand customer behavior, AI will transform how companies engage with clients. Predictive models will enhance product recommendations, while AI-driven sentiment analysis will ensure tailored responses to feedback. Voice and natural language processing will further refine communication, making customer interactions seamless and intuitive.

AI tools will fully execute tasks such as onboarding a client, and make key decisions formerly made by humans.

Top AI applications for SMBs today

Here are a few of the most impactful AI technologies small- and medium-sized businesses (SMBs) can deploy today:

1. Customer service and chatbots: AI-powered chatbots can provide 24/7 customer service without hiring additional staff. Tools like Intercom and Drift allow small businesses to automate routine customer inquiries, freeing up human resources for more complex tasks. These bots can answer FAQs, track orders and offer personalized product recommendations. Many customer onboarding tools are available to SMBs at an accessible price point.
2. Cyber protection: AI-powered fraud detection tools like Kount and ClearSale are becoming essential for SMBs, especially those in e-commerce. These tools use AI to detect suspicious activity in real time, helping businesses prevent chargebacks and fraudulent transactions and ultimately protecting their bottom line.
3. Personalized marketing: AI tools like HubSpot and Mailchimp use machine learning to analyze customer behavior and send personalized emails based on purchase history, browsing habits and engagement levels. SMBs can leverage these tools to improve customer retention, drive sales and increase the effectiveness of marketing campaigns.
4. Inventory management: AI can manage inventory more efficiently by predicting demand patterns and suggesting optimal stock levels. Tools like StockIQ and CognitiveScale analyze historical sales data, seasonal trends and other factors to forecast inventory needs, minimize waste and maximize profits.
5. Recruitment: AI streamlines the hiring process by automating the initial screening of candidates using tools like JazzHR or Greenhouse. These platforms use machine learning to assess résumés and match candidates with job requirements, saving time and ensuring a better fit for open positions.
6. SOPs: Scribe provides the ability to track online behavior and create step-by-step standard operating procedures.

Types of GPTs and bots

While ChatGPT is widely used, other tools are gaining adoption:

	Chatbots such as Gemini and ChatGPT engage in natural conversations and provide customer support. Expect the emergence of custom GPTs, such as training a GTP to be your company’s travel planner.
	Content generators like Jasper are assisting in writing articles, marketing copy, and blog posts.
	Language translators such as DeepL translate text between languages for improved communication.
	Code assistants such as Copilot help developers with code generation and debugging. Copilot, part of the Microsoft suite will be imbedded in MS Office products.
	Research assistants like Grammarly can summarize information and aid in data analysis.

Note: We do not endorse these products; these are only examples.

IT spending

As a result of the AI tax, companies are spending more on IT. The average mid-market company ($50M-$1B) spends 4% of revenue on technology, and about a third on personnel.

Spending Priorities in IT

Source: Deloitte and PwC

5G and its impact on connectivity

The expansion of 5G networks will bring faster internet speeds, lower latency and greater connectivity, which will significantly benefit SMBs.

Imagine a small retail store with interconnected smart devices — inventory management, security cameras and payment processing all running smoothly without interruption. The improved connectivity can streamline operations, improve customer service and even allow businesses to adopt advanced tools like augmented reality (AR) for better customer experiences.

SMBs in rural areas with poorer internet connectivity can especially benefit from 5G. For example, in agriculture, growers are installing smart sensors across fields to monitor soil quality, irrigation levels and crop health in real time — something previously only feasible for large agribusinesses.

5G is the precursor to 6G, which is just around the corner. With so much interest surrounding this from major companies like Apple, Huawei, LG, and Samsung, as well as research institutes and countries like China, the United States, Japan, and the EU, development is bound to be speedy.ⁱ

Robotics and automation

A field that goes hand-in-hand with AI is robotics.

Tesla announced its robotaxi concept to some fanfare and controversy. The company is also moving toward the utilization of its humanoid robots in its auto plants. Tesla is facing strong state-sponsored Chinese competition.

Figure, an AI-powered robotics firm, announced $675 million in its latest funding round, giving it a valuation of $2.6 billion. OpenAI, Microsoft and Nvidia have entered the fray.

See these reports on manufacturing robotics and automation:

• Protolabs Manufacturing Robotics Report
• Plex State of Smart Manufacturing

Edge computing and the Distributed Cloud for SMBs

Edge computing, which processes data closer to where it’s generated rather than sending it to a data center, is particularly useful for SMBs that rely on real-time information (like in retail or manufacturing). By reducing latency, edge computing allows businesses to make faster decisions, such as restocking inventory or adjusting production schedules.

Retailers are using edge computing to track foot traffic in real time and automatically adjust in-store marketing or promotions based on peak hours. Factories are using production floor sensors to monitor equipment and prevent costly downtime. With the growth of the distributed cloud, smaller businesses can access more affordable and customizable cloud services.

Green technology

SMBs are increasingly expected to adopt greener practices, and the technology to make this shift is becoming more accessible and affordable. SMBs can now easily integrate renewable energy solutions like solar panels, but the real trend to watch is energy storage. Improved battery technologies will allow more effective storage of renewable energy and reduce reliance on the grid. Additionally, local governments are providing subsidies and tax breaks to businesses that adopt green tech, making this investment even more attractive.

Final thoughts

As we move toward 2025, SMBs can embrace a wide range of tech — beyond just AI — to improve operations, enhance customer experience and compete in the global marketplace. Whether it’s through integrating workflows, green technologies or AR, the future is bright for tech-savvy SMBs looking to gain a competitive advantage.

References

ⁱ https://www.cnbc.com/2023/03/08/what-is-6g-and-when-will-it-launch-telco-execs-predict.html

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