2025 Technology & Market Predictions

With the start of a new year, the Vation Ventures Research & Insights team has compiled our top 10 technology and market predictions for 2025. Last year, our 2024 predictions generated an 80% accuracy score, covering AI advancements, rebounding investment activity, and market and industry developments across biotech, web3, and emerging mobility ecosystems.  

Our top 10 technology and market predictions for 2025 comprise six technology-specific and four market-specific predictions. Although we anticipate a largely and increasingly favorable and competitive market environment, driving accelerating innovative emerging technology advancement and adoption, there is also an expectation for heightened disruption, strain, and risk across labor markets, identity threat surfaces, and OT ecosystems. Additionally, improving AI maturity and rising workload intensity, demand, and resourcing will accelerate and catalyst an array of emerging technology market segments, particularly across foundational and critical infrastructure and industries, enabling incremental improvement and progression of transformative technological innovations.  

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1. Accelerating Cybersecurity Market Momentum  

The cybersecurity industry will continue to build on its strong 2024 momentum with relatively robust IPO & platform-driven M&A activity, VC & PE support, enterprise spending, and financial performance.

In 2025, the cybersecurity sector is anticipated to sustain its robust growth trajectory, marked by a robust pipeline of anticipated IPOs (Axonius, Claroty, Dragos, Abnormal Security, Cribl, Wiz), growing platform-driven M&A initiatives among financially capable industry leaders, and a continuation in growing VC and PE support. Amidst the acceleration in risk surface interconnectivity and complexity, as well as the AI-driven rise in attack frequency, sophistication, and severity, the industry is well poised to benefit from intensifying secular tailwinds, including an improvement in enterprise spending, strong financial performance, and favorable competitive dynamics.  

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2. Private Market Liquidity Release

The expected global pullback in regulatory scrutiny, alongside an improvement in market dynamics, will lead to greater M&A & IPO exit market activity, generating distribution liquidity following a relatively prolonged private market drought.  

The convergence of eased regulatory scrutiny and improved market conditions is expected to invigorate M&A and IPO activities in 2025, providing much-needed liquidity in private markets. As noted in our Ecosystem Recalibration: Evolving Venture Capital & Private Equity Investment Dynamics research article, the previous years’ exit drought has prompted private equity firms to explore secondary transactions and continuation funds to manage portfolio liquidity, facing growing pressures and challenges associated with portfolio company, fundraising, and distribution management. With a more favorable regulatory and market environment, private investors are poised to capitalize on pent-up demand, stimulating greater exit market, liquidity, and distribution activity.  

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3. Competition-Focused Regulatory Pullback

There will be a pullback in recent aggressive posturing & scrutiny across market activities by US & European regulatory bodies to stimulate, attract, and drive critical technology innovation & leadership.  

U.S. and European regulatory bodies are anticipated to moderate their recently stringent and aggressive oversight in 2025 to stimulate technological innovation and maintain global competitiveness. This strategic pullback, exhibited by European authorities and the Trump administration, aims to attract and foster critical technology developments, particularly in sectors like AI, data centers, semiconductors, telecommunications, and robotics. Further, both regions have signaled growing support for public-private partnerships (PPP), although the U.S. is likely to take a more indirect and less subsidized-focused approach. Regulatory recalibrations across the U.S. and Europe will further accelerate and stimulate regional technological innovation, market activity, and competitive evolution.  

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4. Labor Strain & Volatility

The convergence of AI-driven automation, re-shoring initiatives, and shifting geopolitical & policy dynamics will amplify strain & volatility across labor markets, particularly within industries undergoing rapid technological transformation.

The labor market is projected to experience continued strain and volatility due to a convergence of various social, technological, and political dynamics and drivers of change. The increasing adoption of AI and automation technologies will likely upend and displace traditional employment patterns, with advancing adoption and application driving more frequent and disruptive labor strikes. Simultaneously, an anticipated rise in re-shoring and near-shoring initiatives driven by geopolitical tensions, as well as expected immigration policy changes, will generate further relative strain, disruption, and volatility in the near term. These shifts may exacerbate strained talent supply-demand dynamics and critical enterprise skill gaps, such as technical emerging technology skills, and create challenges for workforce adaptation, particularly in industries undergoing rapid and immediate AI-driven transformation.  

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5. Data Center Expansion

The insatiable demand for increasingly intensive AI technologies & workloads amidst a supply-demand imbalance will drive significant public, private, and public-private data center investment, retrofitting, and development initiatives.  

The escalating demand for intensive AI workloads and technologies is leading to a significant strain of supply-demand dynamics within the data center industry, leading to an expectation for accelerated facility investment, development, construction, and retrofitting initiatives. Last year, major tech companies and hyperscalers poured more than $180 billion into data center expansion last year alone, which is anticipated to continue at an escalating rate in the coming year, bolstered by government support and PPP support, to capitalize on and accommodate the rapid growth in data center infrastructure demands and supply gaps.³ In 2025, an estimated 10 gigawatts (GW) of new data center capacity is projected to commence globally, with approximately 7 GW reaching completion, reflecting a compound annual growth rate of 15% through 2027.⁴ The persistence of vacancy and supply constraints and growth in the global project and construction pipeline will serve as a continued secular tailwind in the near term; however, the industry must navigate potential power grid bottlenecks and heightened energy consumption, necessitating innovative solutions to ensure sustainable development and driving the next prediction.  

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6. Catalyzed Energy Innovation

AI-driven modernization and data center development initiatives will be significant catalysts in accelerating the practical development, application, and adoption of innovative, modular, and sustainable energy solutions.

The surging energy requirements of AI and data centers will serve as a meaningful catalyst driving significant advancements in sustainable energy technologies, including modular storage and generation systems, nuclear fusion, geothermal-based solutions, and increasingly advanced immersion cooling systems for data centers. Although there may be a relative pullback in direct government funding and subsidization, there is an expectation for continued electrical grid, storage, and transmission infrastructure modernization through 2025, particularly those focused on advancing domestic energy independence, which will further accelerate and support increasingly intelligent, resilient, and sustainable energy infrastructure systems. Moreover, the growing integration of AI into energy management systems will further optimize the performance and feasibility of these technologies through sophisticated data analytics and predictive capabilities, serving as an additional tailwind and pillar of support.  

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7. Accelerating Identity & OT Security Threats

The risk surface & security landscape will be characterized by growing frequency, sophistication, and severity across identity- and OT-based threats impacting data availability & operational reliability.

Amidst growing AI adoption and distributed technology ecosystem connectivity, the expanding and emerging risk surface will be driven primarily by identity- and OT-based threats. From an identity perspective, growing adversarial AI/ML enablement will significantly enhance the frequency, sophistication, and severity of ransomware, social engineering, and phishing campaigns, leading to a growing trend of high-profile data leaks and breaches, similar to the Snowflake breach of 2024. Further, in an environment characterized by limited observability, expanding shadow IT ecosystems, and growing interdependency, accelerating IT-OT convergence stemming from AI-focused modernization initiatives will exacerbate identity and data risks, as well as lead to growing technological vulnerabilities and operational disruption, similar to the infamous Crowdstrike meltdown of 2024. As a result of heightened identity and OT security threats, largely targeting enterprise and customer data, there will be a corresponding prioritization across markets and industries on advanced authentication, access controls, user entity behavior analytics, and observability tools to improve intelligent detection and automated remediation.  

Privileged Identity Focus: Google Cloud’s 1H25 Threat Horizons Report reveals that weak or non-existent credentials were the leading entry point for cyberattacks in the latter half of 2024, accounting for nearly half of observed intrusions. Additionally, attackers exhibited a particular focus on overprivileged service accounts to enable lateral movement, observed in over 60% of follow-on attacks and highlighting the growing need for stricter access controls and more effective privileged account management.

8. Defense, Telecom, and Space Boom

Heightened geopolitical tensions & national security priorities will drive interconnected surges in defense, telecommunications, and space technology investment, modernization, and innovation

2025 is anticipated to witness a significant surge in the defense, telecommunications, and space technology industries, all of which play a meaningful and interconnected role with one another and have become growing government focus areas and priorities. Geopolitical tensions and the imperative for national security will drive increased investments in defense technologies, including advanced surveillance systems and autonomous military drones. In telecommunications, geopolitical and national security technology risks and concerns will similarly continue to generate a growing focus on domestic infrastructure investment and modernization, supported by the broader 5G network completion and early initial development of 6G technologies. Lastly, the space industry is experiencing unprecedented growth, with governmental and private entities launching missions focused on satellite intelligence, surveillance, network systems, launch and support services, and infrastructure equipment technologies.  

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9. Multimodal AI & Computer Vision Advancement

The integration of edge computing, synthetic data, and advanced data systems will fuel multimodal AI & computer vision technology advancement, emerging as key competitive & technological differentiators.

Although GenAI undoubtedly stole the spotlight in 2024, we anticipate that 2025 will exhibit a relatively growing focus on and acceleration in multimodal AI and computer vision advancement, adoption, and application. Building on initial traction and development, the growing integration of edge computing – facilitating faster and more accurate real-time processing – and synthetic data – addressing traditional training limitations – are driving greater multimodal computer vision technologies across relatively immediate and high-impact industries, including retail, defense, manufacturing, transportation, and healthcare. As enterprises increasingly leverage lakehouse-based data management systems, there will be a corresponding tailwind to multimodal AI technologies, which can analyze unstructured and cross-format data to drive more advanced and versatile computer vision integration. Furthermore, spatial computing and computer vision are anticipated to serve as growing sources of competitive differentiation for leading AI providers, driving advancements in such as evolving and emerging market segments, including extended reality (XR), robotics, and autonomous drones. As a result of this confluence of drivers and dynamics, multimodal AI and computer vision systems are anticipated to represent one of the next most significant, prioritized, and notable AI technology segments exhibiting meaningful advancement, adoption, and activity through 2025. ‍

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10. Marginal Quantum Progression

Despite its transformative potential, quantum computing is expected to make incremental advancements in 2025, remaining complementary to classical computing in niche, high-impact applications.

Although exhibiting recent advancements and carrying profoundly transformative implications, quantum computing is expected to make incremental strides through 2025 rather than achieving groundbreaking milestones. While research and development in quantum technologies continue, practical and scalable quantum computing solutions remain nascent. As a result, quantum technologies are likely to play a complementary role alongside classical computing systems, focusing on niche applications that can deliver practical and measurable advantages. Efforts will prioritize improving qubit stability, advancing error correction techniques, and refining quantum algorithms for further long-term practical application. Additionally, expanding the range of quantum simulations and enhancing quantum software tools will likely become a central and driving priority for researchers and innovators, underscoring the contingent and complementary role of supportive emerging technologies, including AI and digital twin-based simulation.  

Quantum Case Study: Northwestern University engineers have achieved a groundbreaking milestone by demonstrating quantum teleportation over fiber optic cables already carrying traditional Internet traffic. By carefully selecting wavelengths and reducing interference, they proved that quantum and classical communications can coexist within the same infrastructure. This breakthrough paves the way for scalable, secure quantum networks and advanced applications without the need for costly, dedicated systems, marking a significant step toward the practical integration of quantum technologies into real-world networks. 

Quantum Case Study: Google has announced a breakthrough in quantum computing with its new chip, Willow, which is capable of solving a benchmark computing problem in five minutes, which would take a classical computer billions of years. Willow incorporates 105 qubits, and Google has developed techniques to reduce errors as more qubits are added, addressing a long-standing challenge in quantum error correction. With a dedicated fabrication facility and a focus on qubit reliability, Google is accelerating innovation toward practical quantum applications in medicine, AI, and other transformative fields.  

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Conclusion

Vation Ventures’ annual top 10 technology and market predictions for 2025 highlight a transformative yet complex landscape where technological innovation and market evolution intersect to catalyze new dynamic disruption and opportunity. Industries will accelerate the development and adoption of cutting-edge advancements, from AI-driven data centers and sustainable energy solutions to quantum computing and multimodal AI, driving both incremental progress and disruptive change. At the same time, market forces such as heightened cybersecurity activity, private market liquidity recovery, and regulatory recalibration will reshape competitive dynamics while amplifying opportunities for growth. Amid these advancements, enterprises must navigate an evolving, expanding, and complex set of challenges, including labor market volatility and rising identity and OT security threats, to thrive in an increasingly interconnected and innovation-driven world. The year ahead promises a dynamic blend of risk and reward, emphasizing the increasingly critical necessity of delicately balancing innovation and optimization.

Are you interested in knowing more about the latest technology and market predictions? Our Research & Insights team is always looking for what’s changing and coming next across technologies, industries, and markets. Get in touch today to learn more about how our team can help you navigate 2025 with actionable research and insights.  

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