2025 Year in Review: AI Becomes Infrastructure

December 22, 2025

2025 was the year AI stopped being special and became expected. AI tools are now standard equipment. AI skills are baseline requirements. AI governance is operational. The transformation isn’t coming—it arrived.

Here’s the 2025 year in review.

The Year in Numbers

ai_metrics_2025:
  adoption:
    developers_using_ai: "85%+"
    enterprises_with_ai_production: "70%+"
    ai_engineer_job_postings: "3x vs 2024"

  technology:
    cost_reduction: "60% average vs 2024"
    context_windows: "1M+ tokens available"
    latency_improvement: "2x faster"

  market:
    ai_infrastructure_spend: "$50B+"
    ai_startup_funding: "Concentrated in winners"

Major Developments

Model Progress

model_developments_2025:
  reasoning:
    - Reasoning models became practical
    - Multiple providers offering
    - New application categories

  multimodal:
    - Video understanding matured
    - Audio became native
    - Cross-modal reasoning improved

  efficiency:
    - Small models got much better
    - Inference costs dropped
    - Edge deployment practical

Practice Evolution

practice_evolution_2025:
  development:
    - Evaluation-driven standard
    - Multi-model architectures normal
    - Prompt engineering matured
    - Testing frameworks established

  operations:
    - AI observability required
    - Cost management essential
    - Security practices defined
    - Incident management adapted

  organization:
    - AI engineering established role
    - Governance operational
    - Center of Excellence model
    - ROI measurement expected

Key Events

key_events_2025:
  q1:
    - Reasoning models went mainstream
    - MCP adoption accelerated
    - Enterprise AI platforms consolidated

  q2:
    - Video AI became practical
    - AI governance regulations enforced
    - Agent capabilities improved

  q3:
    - Small model quality leap
    - AI costs dropped significantly
    - Enterprise scaling accelerated

  q4:
    - AI became standard infrastructure
    - Consolidation in tooling market
    - Preparation for 2026 regulation

What We Learned

Validated Principles

validated_2025:
  augmentation_over_automation:
    "AI works best as assistant, not replacement"

  evaluation_is_essential:
    "Can't ship quality without measurement"

  multi_model_wins:
    "Right model for each task"

  humans_in_loop:
    "Oversight remains necessary"

  governance_enables:
    "Good governance speeds adoption"

Surprises

surprises_2025:
  positive:
    - Small models better than expected
    - Enterprise adoption faster
    - Developer productivity gains real

  challenges:
    - Agent reliability still limited
    - Regulation complexity
    - Talent market competitive

Looking to 2026

Predictions

predictions_2026:
  technology:
    - Agents become more reliable
    - New modalities emerge
    - Costs continue dropping
    - Open models advance

  adoption:
    - AI ubiquitous in enterprise
    - Industry-specific solutions mature
    - Global adoption accelerates

  challenges:
    - Regulation complexity increases
    - Security threats evolve
    - Sustainability questions emerge

Preparation

prepare_2026:
  technical:
    - Agent development skills
    - Advanced evaluation
    - Multi-modal handling
    - Privacy-preserving AI

  organizational:
    - AI strategy maturity
    - Governance refinement
    - Talent investment
    - Sustainability planning

Key Takeaways

The AI transformation is complete. Now it’s about execution.