To help you understand the trends surrounding AI and other new technologies and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe.) You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…
As economists and investors try to weigh artificial intelligence’s role in the economy, and with stock market bubble fears on the rise, uncertainty over the fast-moving tech is running high. Taking a longer view than the day-to-day headlines, here are five forecasts to help make sense of what’s coming.
1. There will be a flurry of new AI services from leading AI firms in the next year or two to tap new revenue to cover rising costs. OpenAI, for example, recently launched an AI video social media app called Sora and a new web browser. AI companies will push harder into digital advertising and online shopping, both promising markets for their web search and AI chatbots.
2. Though free options are here to stay, AI price hikes are coming. Top tiers of service, which provide the highest-quality AI responses and much more usage, will see higher prices. Consumers and businesses will have to pay more for AI tools from Microsoft, OpenAI, Alphabet, Anthropic and others. Generative AI is being integrated into most software, from photo editing to sales tools, and prices are sure to rise.
3. AI companies will push harder to tap potentially lucrative new markets, such as education, government, medicine, energy, defense and finance. Education seems ripe for making a lot more revenue in the near term, as both colleges and K-12 schools adopt AI tech. However, note that there’s a lot of pressure to show that the tech pays off, such as by finding clear evidence that AI makes accurate medical diagnoses.
4. Market volatility is likely with bubble fears rising. Remember DeepSeek? Earlier this year, the Chinese AI company sparked a major sell-off of AI tech stocks, plus other stocks in the AI sphere. Some investors thought a new breakthrough meant AI companies wouldn’t need as many chips. That wasn’t true, but expect more DeepSeek moments, stemming from concerns related to tech advances or spending slowdowns that could crimp sales of chips and other hardware needed to support AI services.
5. Shortages of chips, energy, labor and more will slow down AI projects. The continuing shortages mean it’s very likely that some plans for data centers are delayed, as major players rush to find all the needed supplies, ranging from computer memory and storage to HVAC systems and electrical equipment. Meanwhile, there’s growing local opposition to building data centers, which is poised to get more intense. For those who fear that AI spending and development is unsustainable, these headwinds may provide some reassurance that the breakneck spending on data centers will slow down to a more sustainable pace.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
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