Jeff Kagan: The AI growth bubble likely won’t burst, but growth will be uneven

March 26, 2025 at 11:53 AM EDT

Artificial intelligence is riding the biggest, multibillion-dollar, international growth wave of all time. That being said, Forbes magazine reports some experts are predicting the AI bubble could burst this year. So, which is the truth?

Is AI growing so big and so fast it is getting out over its own skis? Will AI growth slow down? Or will it continue as it has been? While no one knows, I have what you may consider an interesting answer to this perplexing and important question.

My take on whether AI will slow down in 2025 is it has some truth, but it’s not what you think, and it’s definitely not the end of the world.

Most people would assume a fast-growing and new technology just starting its growth wave would continue. While that is generally true, artificial intelligence is not new, and it is not just one single technology or level. In fact, it has been with us for many decades, and in many different forms.

The best way to think of this is AI is a top-level name over a huge category with multiple different sectors. Each of these sectors are in different areas and are growing at different rates. The AI growth wave to-date has been full of ups and downs. Today, we are going through an enormous and fast-growing, multistep growth wave.

AI for all the players

AI is seen as a technology that every player in every sector must rapidly embrace for multiple reasons. One, it can change a company and an industry. Two, it can redefine the leadership of an industry. Three, every competitor is jumping in, so whether you want to or not, you are forced to enter this new game. There are many reasons, but I think you get my point.

So, the various AI segments are all at different levels on the growth chart. Some are rapidly growing. This is continually changing space. That’s why my take on this question of whether there will be an AI crash this year is simple. I think AI, as a whole, will continue to grow. Period.

That being said certain sectors, certain versions and certain companies will see rapid growth. Some will see new growth. Other sectors will slow down and will ultimately be replaced.

Some of these are large while others are small today. Some are fast growing while other parts show slower growth. Parts write its own software, while other parts do not. Some are on the early and growing side of the growth wave, while rapid growth has passed in other sectors. Some are fast growing today, while others will be that way tomorrow.

These differences are why we cannot and should not gather the entire AI space into a single space. There are many and each has its own strengths and weaknesses.

The challenge of pinpointing AI growth

I am not saying the entire AI space will slow down. However, I am saying certain companies or certain sectors will grow, others will crest and still others will decline. So, your perspective all depends.

AI is a vast and fast-changing space and always growing space. It is very difficult for us to keep up with. Even for AI industry experts. It is very expensive for companies and governments to stay up-to-speed.

All that is why I believe AI, as an industry, will continue to show strong growth in many different segments.

Knowing which sector will rapidly grow, which will see its growth crest is always the challenge. That’s the way AI has always been. And I see no changes in 2025 and beyond.

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