The Explosion of New AI Tools

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published 12 March 2025

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…

AI is on the cusp of going mainstream. By next year, more money will be spent globally on software with generative AI than on software without it, according to Gartner, a technology market research company.

This year, nearly every major software company will have a generative AI feature in all their products, or will have plans to roll them out this year or next, noted John Lovelock, an analyst at Gartner, in a recent presentation.

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Spending on generative AI software in 2026 will be nearly $400 billion globally, compared with $282 billion on traditional software, predicts Gartner. By 2028, those figures will be $700 billion and $188 billion. AI-heavy software landed $18 billion in 2023, the first full year the technology was available to the masses. OpenAI’s ChatGPT, a text-generating AI chatbot, was released to the public in November 2022.

The trend is rapidly putting powerful AI features in the hands of millions of people. For example, Adobe Photoshop’s Generative Fill lets users select a portion of an image to add anything, such as the perfect water drop on a flower. Microsoft’s CoPilot lets users create slideshows by picking a template, providing a text outline and letting AI do the rest. Want to tweak a slide? Simply write a suggestion to Microsoft’s AI chatbot. AI is also becoming prevalent in software for analytics, customer relationship tools and supply chain systems.

The deployment of AI brings both opportunity and risk for businesses. The companies that are fastest to harness productive uses will have an edge, including workers who figure out how to use AI creation tools to produce text, images, charts, computer code and more, or to better analyze data, images or written research.

But businesses rushing to use AI without a plan could lead to damaging missteps, ranging from wasted hours to security threats. Plenty of AI tools won’t be fully baked and won’t help productivity much at first. Companies need a clear plan and set of guidelines for generative AI before taking the plunge.

Meanwhile, consumers are seeing AI seamlessly make its way into popular apps and websites, whether they want it or not. Facebook and Instagram users can tap Meta’s AI chatbots to answer questions or generate images. Alphabet’s CEO Sundar Pichai recently said that Google’s AI Overviews, its new AI search tool that provides detailed explanations to Google search queries, “are one of our most popular Search features ever.”

Rapid adoption of generative AI holds a lot of promise for the economy, along with peril for businesses that face disruption and workers who fear displacement. However, that doesn’t mean the fallout will happen overnight. Even with AI getting rolled out at an unprecedented pace, expect the widescale impact to take place over years or even decades. The AI age is just getting started.

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John Miley is a Senior Associate Editor at The Kiplinger Letter. He mainly covers technology, telecom and education, but will jump on other important business topics as needed. In his role, he provides timely forecasts about emerging technologies, business trends and government regulations. He also edits stories for the weekly publication and has written and edited e-mail newsletters.

He joined Kiplinger in August 2010 as a reporter for Kiplinger's Personal Finance magazine, where he wrote stories, fact-checked articles and researched investing data. After two years at the magazine, he moved to the Letter, where he has been for the last decade. He holds a BA from Bates College and a master’s degree in magazine journalism from Northwestern University, where he specialized in business reporting. An avid runner and a former decathlete, he has written about fitness and competed in triathlons.