In 2025, artificial intelligence (AI) is forecast to evolve from a tool for work and home to an integral part of both.
This is according to Microsoft’s 2025 AI predictions, which forecast AI-powered agents will do more with greater autonomy and help simplify life for consumers at home and for the workforce on the job.
On the global stage, AI will help people find new ways to address some of the biggest challenges faced by society, from the climate crisis to healthcare access.
This progress will be driven by advancements in AI’s ability to remember more and reason better, among other innovations, reveals the forecast.
“AI is already making the impossible feel possible, and over the past year we’ve seen significant numbers of people and organisations moving from AI experimentation to more meaningful adoption,” says Chris Young, executive vice president of business development, strategy and ventures at Microsoft.
“This is the start of a full-scale transformation of how this technology will change every part of our lives.”
In the last year alone, generative AI usage jumped from 55% to 75% among business leaders and AI decision-makers. New AI tools will bring even more potential, adds Young.
Six AI trends to watch — and how Microsoft will innovate on each — in 2025:
*AI models will become more capable and useful
Over the past year, AI models became faster and more efficient. Today, large-scale “frontier models” can complete a broad range of tasks from writing to coding, and highly specialised models can be tailored for specific tasks or industries.
In 2025, models will do more — and do it even better.
Models with advanced reasoning capabilities, like OpenAI o1, can already solve complex problems with logical steps that are similar to how humans think before responding to difficult questions.
These capabilities will continue to be useful in fields like science, coding, maths, law and medicine, allowing models to compare contracts, generate code and execute multistep workflows.
These advancements will be important in model innovation, but so will progress in data curation and post-training.
Making models faster, better and more specialised will create new and more useful AI experiences, including with agents, in 2025.
“Think of agents as the apps of the AI era,” says Charles Lamanna, corporate vice president of business and industry Copilot. “Just as we use different apps for various tasks, agents will begin to transform every business process, revolutionising the way we work and manage our organisations. With advancements in memory, reasoning and multimodal capabilities, agents will handle more complex assignments with new skills and ways to interact.”
*AI will accelerate scientific breakthroughs
AI is already having a dramatic impact around the world, driving advances in everything from supercomputing to weather forecasting. It’s fuelling historic breakthroughs in scientific research and promises to unlock new capabilities in the natural sciences, sustainable materials, drug discovery and human health.
One of the most exciting things to watch in 2025 will be how AI’s use in scientific research fuels progress in addressing some of the world’s most pressing concerns, says Ashley Llorens, corporate VP and managing director at Microsoft Research.
“We’ll start to see these tools having a measurable impact on the throughput of the people and institutions who are working on these huge problems, such as designing sustainable materials and accelerating development of life-saving drugs,” states Llorens.
*AI will become more resource‑efficient over time
While AI needs resources like energy, innovative solutions are helping with power constraint challenges.
Even as global data centre workloads in 2020 were roughly nine times what they were in 2010, for example, data centre electricity demand increased only 10%.
“In the coming years, new data centres that support AI will come online and consume zero water for cooling and the company will expand its use of superefficient liquid cooling systems such as cold plates. It’s all part of a broader effort to make the infrastructure AI is built on more efficient and sustainable in 2025.”
*AI agents will change the shape of work
In 2025, a new generation of AI-powered agents will perform more advanced functions – even handling certain tasks on behalf of the users.
With advancements in memory, reasoning and multimodal capabilities, agents will handle more complex assignments with new skills and ways to interact.
“Think of agents as the apps of the AI era,” notes Lamanna. “Just as we use different apps for various tasks, agents will begin to transform every business process, revolutionising the way we work and manage our organisations. Organisations can reimagine processes like creating reports and human resources tasks such as helping resolve a new laptop issue or answering benefits questions, freeing employees to focus on higher value work.”
Businesses can set up multiple agents to alert supply chain managers about inventory disruptions, recommend new suppliers and execute sales orders, handling daily challenges to help keep sales coming in.