Predictions for 2025: Defining AI Moments, Personal Assistants and Outside-the-Box Investments

By Tom Sheridan

As we move into 2025, the global early-stage technology ecosystem is asking itself where 2024’s dry powder will land and what to expect in the new year. Reflecting on what we’ve seen and where we’re headed, here are my predictions as an early-stage investor for 2025.

1. VCs invest outside the box to generate returns

Bluntly, the market saw fewer ‘good’ companies to invest in across 2024. With limited opportunities, along with growing pressure from LPs on VCs to generate returns, investors needed to redefine what ‘good’ looked like. And, as a result, we witnessed a trend of investors looking outside of their typical portfolio areas to invest in historically non-venture scalable businesses. Arguably, some of their investments were rather odd. However, I expect this trend to continue as VC firms continue to look outside their wheelhouse to generate returns, rather than invest in ‘bad companies’.

2. AI transforms legacy industries

2025 will see something of a second-order effect in AI investments. There’s a huge opportunity for non-technical, legacy businesses to leverage AI to address inefficiencies. And I believe we are only just beginning to see the impact the technology has on vertical industries as AI continues to lower the bar to innovation and modernisation. Practically, this will result in VC interest in the AI-driven disruption of previously ‘unloved’ industries. In material science, we are already seeing several verticalised AI models receive significant investment. We’re also seeing models applied to functions like drug discovery and process efficiencies in oil and gas in chemical companies.

3. Personal assistants will rise up

It won’t just be vertical industries that will benefit. With the cost of compute dropping some 80% year-on-year, and efforts by open-source AI leaders to distribute LLMs for free, I fully expect the barriers to entry for AI to fall. As a result, 2025 could well be the year that personal AI assistants become more ubiquitous; at home, at work and in schools. It opens up huge investment opportunities in the consumer and edtech space and I’m excited to see how these new ideas develop.

4. AI scrutiny and legal battles are set to make headlines

We’ll pivotal developments in the regulation and copyright law governing new applications of AI in 2025.

The legal battle over foundational model training is set to be decided in a high-stakes copyright case ruling whether OpenAI and other major LLM model providers should be paying more for training data. If rulings don’t favour these AI companies and their backers, AI companies could be sued out of existence or be required to change their business models to limit payments to data providers.

What’s more, 2024 saw Europe emerge as a frontrunner in regulating AI with its landmark EU AI Act. What happens next is less certain. AI’s strategic importance to the economies of individual EU member states could clash with any widened regulatory scope. Whatever the result, founders and VCs need to be prepared for regulatory developments that favour incumbent industries at risk of AI disruption on the basis that they employ tens and thousands of EU citizens. Vocal criticism of the EU’s approach to regulating AI from tech quarters in 2025 is more than likely to fall on deaf ears.

5. The stage is set for new privacy trade-offs

In 2025, consumers will raise more questions over privacy and the trade-off between giving out data in return for a more personalised and automated experience. And at what cost?

These questions have, of course, existed since the Cambridge Analytica scandal in 2015. But in 2025, it will reach new heights. Today, LLMs know more about you than ever before. They can even pretend to be you – mimicking your voice, your mannerisms and your online behaviours. We are at a point in time where we will give AI agents access to our bank accounts to shop for us. Google and Microsoft are already developing AI agents to make purchases for us, such as booking flights and hotels. As investors, it will be interesting to watch these developments as well as users’ responses to how much data they are willing to give up.

Another unpredictable year ahead

We enter 2025 with, perhaps, some more optimism than we did at the start of 2024. We expect to see new developments and interest in previously overlooked sectors and, with that, greater diversity in investments. We expect to see the promises made by AI companies come to fruition as enterprises demand to see real ROI from the technologies.

But there’s also scope for greater uncertainty with the upcoming inauguration of a new US president and new regulations around AI looming. VCs, too, still face mounting pressure from LPs to invest in high-quality companies. For founders, my advice: keep ahead of the trends and maintain a strict focus on developing the best possible value proposition.

About the Author

Tom Sheridan is a VP on RTP Global’s US team. He is focused on early-stage investments in areas including AI/ML, infrastructure, dev tooling, and B2B SaaS. He loves to find and help the founders whose idea creates an entirely new market and becomes the thing that, in ten years, their customers can’t live without.