Emerging Tech Sectors Set to Dominate in 2025
These days, it can feel like most conversations across the tech sector come back to one topic: artificial intelligence. It’s no surprise we’re hearing more and more about a possible “AI bubble.”
Whether we’re in for a temporary pullback in sentiment around AI or not, the sector has incredible potential, and we shouldn’t bet against it in the long run.
However, in our excitement to opine one way or another on AI, we also shouldn’t neglect the other technologies and trends driving innovation and investment activity across tech. Seasoned venture capital firms like Target Global know that the industry is more diverse than some give it credit for, and they tend to spot opportunities before the rest of us. Here are five tech niches the experts are especially interested in as we venture into 2025.
1. “Small” AI Models
Infamously, large language models like ChatGPT are trained on massive sets of data. It is not much of an exaggeration to equate some training sets to “the Internet” — as in, the whole Internet.
But AI scientists have quickly learned that smaller training sets may be better for certain purposes. These sets are still quite large by human standards, but they allow for narrower, higher-quality inputs.
Ultimately, this may result in more focused AI models that are better at performing discrete tasks. Put together, some number of these models could produce a multi-talented “meta-model” that brings us closer to human-level artificial general intelligence (and perhaps beyond).
2. Battery-Powered Aviation
When we think of autonomous transportation, we typically think of self-driving cars. In fact, we might see fully autonomous helicopters and small planes before we experience true self-driving road vehicles.
Investors are beginning to look seriously at eVTOLs, or electric vertical takeoff and landing aircraft, and the first could come into commercial operation as soon as 2025. These vehicles won’t replace long-haul aircraft anytime soon, but they might revolutionize travel within large urban areas.
3. Autonomous Ground Transportation
We’re still working toward fully autonomous ground transportation as well. In spite of some very public setbacks, that goal no longer seems elusive. For now, however, autonomous cars will be confined to specific areas of major cities where regulations allow, and will be owned and operated by the companies developing them rather than individuals.
4. Precision Fermentation
Precision fermentation “hacks” natural biological processes to produce proteins that mimic those found in the real world. It might sound technical and a bit scary, but some believe the technology holds the key to the mass production of synthetic meat that’s indistinguishable from the real thing. Were that to happen at a reasonable cost, we’ll have a clear path to abundant, healthful food without the harmful environmental impacts of large-scale livestock production.
5. Augmented and Virtual Reality
The company formerly known as Facebook was so bullish on the “metaverse” a few years ago that it changed its name to Meta. It then lost billions trying to make the metaverse a thing. Before long, it was a tech-industry punchline.
But Meta is still going strong, and its early bet on augmented and virtual reality is beginning to look more sensible. In 2025, we’re likely to see more exciting developments in this space.
Is a New Tech Boom on the Horizon?
With interest rates falling, innovation accelerating, and a renewed appetite for risk among early-stage startup investors, it might seem as if the stars are aligning for a new tech boom.
On the other hand, we’ve seen this movie before. They say the stock market has correctly predicted nine of the last five recessions — and, well, the capital markets have a similarly uneven track record when it comes to predicting waves of technology innovation.
So, what will 2025 bring for the tech sector? More than just “AI, AI, AI,” we can safely say. Beyond that, we’ll just have to wait and see.