Why 2025 was a pivotal year for AI

“By 2030, if we don’t have models that are extraordinarily capable and do things that we ourselves cannot do, I’d be very surprised,” said OpenAI CEO Sam Altman in an interview published by Politico in September. After this year, “I think in many ways GPT5 is already smarter than me at least, and I think a lot of other people too”.

The AI advances we have seen this year could “set the world on a path of explosive growth”, said The Economist. “The picture that is emerging is perhaps counterintuitive and certainly mind-boggling.”

The latest ‘charismatic megatrauma’

We have reached a “pivotal moment” in our relationship with artificial intelligence, said Idan Feingold on CTech. Over the last year, the AI hot potato has “evolved from a buzzword to the epicentre of every business conversation”. There has been an unprecedented “surge” in productivity linked to AI innovation, with practical applications advancing “at a pace we have never seen before”.

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“AI has begun to settle like sediment into the corners of our lives,” said David Wallace-Wells in The New York Times. We have emerged from a “prophetic phase” that followed the release of ChatGPT in 2023, and have relaxed into “something more quotidian”. Like many other “charismatic megatraumas”, such as nuclear proliferation and climate change, AI retains the power to distress and disturb, but it no longer provokes mass hysteria.

AI’s role in the healthcare sector has come a long way in the last decade. Microsoft announced this year that its AI diagnostic orchestrator performed four times more accurately than human doctors, with 20% reduced cost. “The real test”, said Time, will be how tools like this perform in real-world settings, but there is hope they might “set the stage” for introducing high-quality medical expertise in parts of the world without access to cutting-edge healthcare.

‘Economic revival’ or ‘financial bust’?

However you look at it, 2025 has been unique. “The hype and the hopes around AI have been like nothing the world has seen before,” said The Economist. Audiences have “marvelled” at ChatGPT’s abilities and were “mesmerised” by Sora 2’s generative video capabilities. That fascination shows no signs of fading; one estimate predicts more than $7 trillion will be spent on AI by the end of the decade.

As the past year progressed, concerns grew over when the AI bubble might burst. But that may be “asking the wrong question”, said Jurica Dujmovic in Market Watch. Don’t be misled by the 2000 dot-com crash: we are experiencing an “orderly deflation” rather than a sudden collapse. Amid the doom and gloom, the AI market still presents “genuine opportunities” for investors, operators and consumers alike.

Focus is now “shifting” to the outlook for AI in 2026, especially concerning its commercial profitability, said The Economist. Revenues from AI in 2025 amounted to a “measly” $50 billion a year, which equated to roughly an “eighth of Apple or Alphabet’s entire annual revenues”. Next year, expect reactions to be even more extreme, with “economic revival”, a “financial bust” and “social backlash” all possible.