As we enter the year 2025, artificial intelligence applications are set to reach mainstream, transforming industries and revolutionizing the way we live.
The real competition in AI isn’t about foundation models. It’s about apps built on top of those models.
Artificial intelligence (AI) apps have revolutionized the way we live and work.
These apps use machine learning algorithms to perform tasks such as image recognition, natural language processing, and predictive analytics.
According to a report by Statista, the number of AI-powered mobile apps has increased from 10% in 2015 to over 50% in 2020.
Popular AI apps include virtual assistants like Siri and Alexa, chatbots for customer service, and personalized recommendation systems.
The frenzy surrounding the development of brainier and deeper ‘frontier‘ foundation models has been intense. OpenAI, Google, Meta, and Anthicropic are all vying for dominance in this space, with billions of dollars being spent on research and development. But despite these advancements, many people remain skeptical about the impact of AI on their daily lives.
The truth is that foundation models are just the beginning. The real innovation will come from companies that can create practical applications that make a tangible difference in people’s lives. This year, we’ll see a shift away from mere hype and towards actual progress in AI.
Artificial intelligence (AI) innovation has been rapidly advancing in recent years, driven by significant investments in research and development.
According to a report, global AI spending is projected to reach $190 billion by 2025.
The field has seen breakthroughs in areas such as natural language processing, computer vision, and machine learning.
Companies like Google, Amazon, and Microsoft are leading the charge with innovative applications of AI in industries like healthcare, finance, and transportation.
DeepSeek, a Chinese AI model, has already demonstrated that it’s possible to match the capabilities of top-tier foundation models at a fraction of the cost. This development is significant because it lowers the barriers for entry into the AI market, making it more accessible to smaller companies and startups.
DeepSea exploration refers to the study and investigation of the deep ocean, which extends from about 200 meters to 11,000 meters below sea level.
This vast, largely unexplored region accounts for over 95% of the Earth's water volume.
DeepSea exploration involves research on marine life, geology, and ecosystems, often using remotely operated vehicles (ROVs) or autonomous underwater vehicles (AUVs).
Advances in technology have enabled scientists to explore deeper and more efficiently, expanding our understanding of this critical component of the planet.
Steve Jang, a VC with a lot of skin in the AI game, agrees that we’re on the cusp of a new era in AI development. ‘A commoditization of the extremely high-value LLM model lab world‘ is underway, he says. This means that companies will no longer just be building wrappers around AI models; they’ll be creating actual products that leverage the capabilities of these models.
In 2023, we saw a surge in the number of AI apps being developed, but this year will be different. We’ll see a flood of new app announcements as companies strive to create tools that are truly useful and innovative.
The iPhone revolution was all about creating native apps that leveraged the full potential of the device. Similarly, the AI market winners will be those that dig deep to exploit every aspect of this new technology. We’ve barely scratched the surface of what’s possible with AI, and it’ll take some time to mine the possibilities.
Josh Woodward, head of Google Labs, says that we have five to 10 years’ worth of capabilities waiting to be turned into new products. Notebook LM, a writer’s support tool developed by his team, is just one example of how AI can be used to create truly innovative apps.
Generative AI has already made a significant impact in various fields, including coding, medicine, and grant-writing. But for too many people, taking advantage of these models requires mastering the art of prompt-whispering. This is about to change as AI agents perform all sorts of tasks, helping us tap into their capabilities without needing to become experts.
Clay Bavor, cofounder of Sierra, says that the creation of recent LLMs has been an inflection point in the quest for robots to act more like agents. ‘We crossed a critical threshold,’ he says. Now, his company’s agents can not only take complaints but also order and ship out replacements – and sometimes devise novel ways to solve problems.
When we look back on this year, it won’t be about a single hot app; it’ll be about the sheer number of new tools that make a big difference. ‘It’s like asking, ‘What products are going to be invented with electricity?” says Jang. Will there be one killer app? Actually, there will be a whole economy.
So watch for a flood of new app announcements this year. And don’t write off the Googles, OpenAIs, and Anthropics as mere commodity providers; they’re hell-bent on producing systems that make our current ones look like rocks – thus raising the bar for the next wave of app developers.
- wired.com | 2025: The Year of the AI App
