The Tech Landscape in 2025: It’s About AI But Not Just That

If you feel like the pace of technological change is accelerating, you’re not alone. The latest McKinsey Technology Trends Outlook 2025 confirms it, painting a picture of a world where innovation isn’t just happening in silos but is converging to create powerful new solutions.

While Artificial Intelligence continues to dominate headlines, the real story is how it’s acting as a catalyst, supercharging a broader set of 13 frontier technologies. McKinsey Technology Trends groups these into three overarching super-trends that every business leader must understand.

Let’s break down these three super-trends and what they mean for your strategy.

Super-Trend 1: The AI Revolution – From Tools to Teammates

AI has evolved from a promising tool to a core driver of business transformation. This revolution is now splitting into two powerful branches:

• Artificial Intelligence: AI is becoming ubiquitous. McKinsey Technology Trends reports that 78% of organizations are now using AI in at least one business function. We’re seeing a “small-model explosion,” where highly efficient, domain-specific AI is making powerful capabilities accessible on everyday devices, reducing costs dramatically.
• Agentic AI: This is the new frontier. Imagine “virtual coworkers” that can autonomously plan and execute multi-step workflows. From handling complex customer service requests to writing and testing code, agentic AI is moving AI from a passive tool to an active collaborator. While still in the experimentation phase, job postings for roles in this field grew by a staggering +985% from 2023-24.

The Bottom Line for Leaders: The question is no longer if you should adopt AI, but how. The focus must shift from experimentation to scaling AI deeply into workflows and preparing for a future of human-agent collaboration.

Super-Trend 2: Compute and Connectivity Frontiers – The Engine Room of Innovation

You can’t have powerful AI without a powerful foundation. This super-trend is all about the underlying infrastructure making everything else possible.

• Application-Specific Semiconductors: The AI boom is driving a golden age of chip design. Instead of general-purpose processors, companies like Amazon, Google, and Microsoft are designing custom chips (ASICs) optimized specifically for AI training and inference, delivering superior speed and energy efficiency. Patent activity in this area is soaring.
• Cloud and Edge Computing: To overcome the massive computational demands of AI, companies are distributing workloads. We’re seeing a simultaneous growth in massive, centralized data centers and a push to process data closer to the source at the “edge,” reducing latency and managing costs.
• Advanced Connectivity (5G/6G & LEO Satellites): With innovations like network slicing and direct-to-smartphone satellite connectivity (e.g., Starlink), high-speed, reliable internet is becoming globally ubiquitous. This is the nervous system that connects everything, from IoT devices in a factory to autonomous vehicles on the road.

The Bottom Line for Leaders: Your digital ambition will be constrained by your compute and connectivity strategy. Investing in modern infrastructure is no longer an IT cost but a strategic imperative for competitiveness.

Super-Trend 3: Cutting-Edge Engineering – The Physical World Gets a Digital Upgrade

This is where the digital and physical worlds truly merge. These technologies are reimagining everything from how we move to how we heal.

• Future of Robotics: Powered by AI foundation models, robots are becoming more adaptive and moving beyond factory floors into logistics, healthcare, and even as humanoid “cobots.” The market for service robots is growing at 20-35% annually.
• Future of Bioengineering: The convergence of biology and technology is accelerating. CRISPR-based therapies are now approved treatments, AI is dramatically speeding up drug discovery (earning a 2024 Nobel Prize in Chemistry), and companies are creating everything from lab-grown meat to sustainable biomaterials.
• Future of Energy & Sustainability: The push for decarbonization is driving innovation in green hydrogen, advanced nuclear (like Small Modular Reactors), and next-generation solar. This trend is critical not just for the planet but also for powering the AI-driven demand for electricity, with data centers becoming a major driver of global power consumption.

The Bottom Line for Leaders: The physical world is becoming a new canvas for innovation. Look for opportunities to apply these engineering breakthroughs to create more sustainable, efficient, and resilient products and operations.

The Winning Formula: Combinatorial Innovation

The most powerful takeaway from the report is that the greatest impact comes from combining these trends. McKinsey Technology Trends illustrates this with powerful examples:

• A factory repair combines AI for diagnosis, Agentic AI to create the repair plan and order parts, and Robotics to execute the physical repair.
• Personalized medicine uses Bioengineering to create a treatment, Digital Trust (blockchain) to ensure its secure custody, and the Future of Mobility (autonomous drones) for delivery to remote areas.

The companies that will win in 2025 and beyond won’t be those that master a single technology, but those that learn to weave these threads together to solve complex problems.

Technology Trend 1: The AI Revolution

The Two Faces of AI in 2025: From Ubiquitous Tools to Autonomous Teammates

If your company is still figuring out how to implement a basic AI chatbot, a new wave of intelligence is already crashing onto the shore. According to the McKinsey Technology Trends Outlook 2025, the “AI Revolution” is no longer a single trend. It has bifurcated into two powerful, parallel forces: the widespread scaling of Artificial Intelligence and the emergent rise of Agentic AI.

Face #1: Artificial Intelligence – The Era of Scaling and Specialization

Artificial Intelligence has moved from a curiosity to a core utility. McKinsey Technology Trends’ data is clear: 78% of organizations are now using AI in at least one business function. But the story has evolved from simple adoption to sophisticated scaling.

Key Developments in AI:

• The “Small-Model Explosion”: Forget only needing massive, trillion-parameter models. A wave of smaller, highly efficient AI models is here. Through techniques like distillation and quantization, these models deliver high-quality outputs for specific tasks while requiring a fraction of the computing power and cost. This makes AI viable for integration into smartphones, household appliances, and industrial equipment, truly embedding it everywhere.
• Multimodal Becomes Mainstream: AI is no longer just text-based. Models are now adept at processing and generating text, images, video, and audio simultaneously. This enhances everything from customer service interactions to complex scientific discovery, like identifying subtle correlations between protein folding and drug efficacy.
• The Rise of Responsible AI: As adoption accelerates, so do concerns. Issues of bias, fairness, plagiarism, and “explainability” are moving from theoretical debates to boardroom priorities. Companies are actively seeking third-party trust evaluations and implementing AI governance platforms to mitigate risk and build trust.

The Bottom Line: AI is now a commodity. Competitive advantage won’t come from having AI, but from how seamlessly and responsibly you’ve integrated it across your enterprise to drive measurable business impact.

Face #2: Agentic AI – Your New Virtual Coworker Arrives

If traditional AI is a powerful tool, Agentic AI is a teammate. This is the most significant shift highlighted in the report. Agentic AI systems are built on foundation models but are distinguished by their ability to autonomously plan and execute complex, multi-step tasks.

Think of a customer service AI that doesn’t just answer a question but also processes the return, updates the logistics system, and orders a new item—all without human intervention.

Why Agentic AI is a Game-Changer:

McKinsey Technology Trends outlines its unique capabilities:

1. Handles the “Long Tail” of Unpredictable Tasks: Unlike rigid, rule-based automation, Agentic AI uses LLMs to correctly respond to novel inputs it wasn’t explicitly programmed for.
2. Uses Human Tools: These agents can operate a web browser, read websites, and fill out forms, just like a person, eliminating the need for custom code for every new system integration.
3. Takes Natural Language Instructions: You can manage them like virtual coworkers, giving instructions and feedback in plain English.
4. Generates Understandable Work Plans: They can articulate their plan and be guided via feedback, making their work transparent and collaborative.

The Talent and Adoption Landscape for Agentic AI

While the potential is revolutionary, the field is nascent. McKinsey Technology Trends gives Agentic AI an adoption score of “2 – Experimentation.” Most companies are testing small-scale prototypes without a focus on near-term ROI.

However, the signal in the talent market is deafening. Despite a small base, job postings for roles in Agentic AI exploded by +985% from 2023-24. The demand is for a new blend of skills: Python, machine learning, and emerging specialties like prompt engineering and natural-language processing.

Real-world examples are already here:

• OpenAI’s Operator can autonomously book flights and order groceries online.
• McKinsey’s QuantumBlack Labs used an agentic workflow to automate credit memo drafting, boosting analyst productivity by up to 60%.
• Salesforce’s Agentforce deploys autonomous AI to resolve support tickets and qualify leads.

The Strategic Intersection: What This Means for Your Business

The companies that will lead won’t choose one “face” of AI over the other. They will leverage both in concert.

• Use Artificial Intelligence to create efficiency gains, optimize data analysis, and enhance existing products and services across the organization. This is your foundation.
• Pilot Agentic AI to reimagine core business processes. Identify high-value, multi-step workflows (in software development, customer onboarding, supply chain logistics) and experiment with deploying “virtual coworkers” to own them autonomously.

This shift requires more than just new technology; it demands a new operating model. As Delphine Nain Zurkiya, a Senior Partner at McKinsey, notes:

“It is also critical to invest more in figuring out how to work with AI when it’s seen as a colleague versus a tool.”

Are You Building a Team of Humans and Agents?

The AI revolution is maturing. The initial wave of tools is being scaled, while the next wave of autonomous teammates is emerging from the lab.

The critical question for leaders is no longer “What use cases can we find for AI?” but rather:

“Which of our core processes can be transformed by a team of humans and AI agents working together?”

Navigating this transition—from tooling to teamwork—is the defining business challenge of the next decade.

Technology Trend 2: Compute and Connectivity Frontiers

The Silent AI Crisis: Why Compute & Connectivity Are the New Battlegrounds for Business

Everyone is talking about AI models, but few are discussing the engine room powering this revolution. The explosive demand for artificial intelligence is straining the very foundations of our digital world, creating a silent crisis—and a monumental opportunity.

According to the McKinsey Technology Trends Outlook 2025, the “Compute and Connectivity Frontiers” are no longer a backend concern for IT departments. They have become the primary strategic battleground where competitive advantages will be won or lost. This isn’t just about faster chips or better internet. It’s about a complete architectural overhaul of our digital infrastructure.

Frontier 1: Application-Specific Semiconductors – The End of the One-Size-Fits-All Chip

The era of general-purpose processors is fading. The AI boom has ignited a golden age of application-specific semiconductors—chips designed from the ground up for specialized tasks like AI training and inference.

Why It Matters:

• Performance & Efficiency: Custom chips, like GPUs and ASICs, provide vastly greater computing power and energy efficiency for AI workloads than traditional CPUs. As one McKinsey expert notes, “breakthroughs in accelerated compute… are the new foundation of innovation.”
• The Hyperscaler Rebellion: Tech giants like Amazon, Google, and Microsoft are now designing their own chips to reduce reliance on dominant suppliers, optimize their specific workloads, and control their destiny. This is reshaping the entire semiconductor competitive landscape.
• Geopolitical Fault Lines: With most advanced chips manufactured in Asia, global supply chains are fragile. Trade restrictions and a push for “technology sovereignty” are forcing companies to navigate a new era of geopolitical risk. TSMC‘s $165 billion investment in US manufacturing is a direct response to this.

The Bottom Line: Your access to and strategy for computing power will directly dictate the scale and cost of your AI ambitions. This is now a C-suite supply chain and strategy issue.

Frontier 2: Cloud & Edge Computing – The Great Distribution

The demand for compute is insatiable. McKinsey Technology Trends analysis suggests global demand for data center capacity could more than triple by 2030, with 70% of that for AI-ready infrastructure. This has triggered a fundamental shift in computing architecture.

The New Model: Distributed Intelligence

Instead of relying solely on massive, centralized data centers, companies are distributing workloads across a spectrum:

• Hyperscale Clouds: For training massive AI models.
• Edge Computing: For processing data closer to where it’s generated (e.g., in a factory, a retail store, or a car) to reduce latency and bandwidth costs.
• Specialized Providers: The rise of players like CoreWeave, which offers GPU-accelerated cloud services, shows that niche providers can thrive by catering to specific, high-performance needs.

This distribution is essential to overcome critical bottlenecks in power availability and physical space, pushing data centers to new locations with abundant energy.

The Bottom Line: A “cloud-only” strategy is becoming obsolete. The future is a hybrid, distributed model that balances centralized scale with localized, intelligent processing.

Frontier 3: Advanced Connectivity – The Nervous System of Autonomy

AI isn’t just in the cloud; it’s in your warehouse, your products, and your city. Connecting it all requires a leap forward in connectivity.

Beyond 5G: What’s Next?

• Network Slicing: 5G-Advanced allows operators to create virtual, dedicated networks on the same physical infrastructure. Imagine a hospital having a guaranteed, high-priority slice for remote surgery while consumers use a separate slice for streaming.
• The 6G Horizon: While 5G connects devices, 6G aims to go further by enabling sensing. 6G networks could act as large-scale sensor systems, detecting the location, movement, and even the composition of objects. As one McKinsey partner states, this offers telcos “a new monetization possibility, instead of just transporting data.”
• Internet from the Sky: Low-Earth Orbit (LEO) satellite constellations like Starlink are making direct-to-device connectivity a reality, blanketing the planet in coverage and enabling new use cases in logistics, agriculture, and remote work.

The Bottom Line: The value of your AI and IoT investments is capped by the quality of your connectivity. Future-proofing means planning for networks that are not just faster, but smarter and more ubiquitous.

Frontier 4: The Trust Layer – Digital Trust & Cybersecurity

As systems become more autonomous and interconnected, the attack surface expands exponentially. Trust is no longer a soft value; it’s a hard business requirement.

The Evolving Threat & Defense Landscape:

• AI vs. AI: Attackers are using generative AI to launch more sophisticated phishing and cyberattacks, while defenders are using the same technology to bolster threat detection and response.
• The Quantum Countdown: Advances in quantum computing pose a future threat to the cryptographic systems that secure our data today, pushing organizations to explore quantum-resistant encryption.
• Geopolitical Cyber-Risk: Critical infrastructure, like undersea cables and satellites, has become a target in geopolitical conflicts, highlighting the need for resilient systems.

The Bottom Line: In a world of autonomous systems, cybersecurity and digital trust are the license to operate. Building resilient, transparent systems is a strategic imperative, not a technical afterthought.

The Convergence: Building on a New Foundation

The true power of these frontiers is revealed when they combine. An autonomous vehicle relies on application-specific semiconductors for real-time vision, edge computing for instant decision-making, advanced 5G/6G to communicate with other vehicles, and robust cybersecurity to prevent malicious attacks.

Technology Trend 3: Cutting-edge Engineering

The Physical World Gets a Brain: How Cutting-Edge Engineering is Reshaping Reality

We’ve grown accustomed to the digital world evolving at lightning speed. But now, that pace of change is exploding into the physical world around us. The labs, factories, and even the farms of tomorrow are being built today with a new breed of intelligent engineering.

According to the McKinsey Technology Trends Outlook 2025, “Cutting-edge engineering” is where the digital and physical realms powerfully converge. This isn’t just incremental improvement; it’s a fundamental rewiring of how we interact with everything from the products we use to the energy that powers our lives.

1. The Future of Robotics: From Caged Arms to Collaborative Coworkers

For decades, robots were powerful but dumb, isolated behind safety cages for repetitive tasks. No more. The infusion of AI is creating a new generation of adaptive, multi-purpose machines.

What’s Changing:

• AI Foundation Models for Robots: The same technology that powers ChatGPT is being trained to control robots. The goal? Systems that can generalize from their training and perform a wide range of tasks they weren’t explicitly programmed for, much like a human would.
• The Humanoid Moment: Companies like Boston Dynamics, Tesla, and Figure AI are developing humanoid robots. The practical reason? They can navigate environments built for humans, using stairs and tools designed for us. This opens the door for general-purpose automation in manufacturing, logistics, and even healthcare.
• The Cobot Boom: The market for service robots is growing at a blistering 20-35% annually. In warehouses, restaurants, and hospitals, collaborative robots (cobots) are working safely alongside people, handling everything from palletization to food preparation.

The Bottom Line: The question is shifting from “Should we automate?” to “What new business models can we unlock with intelligent, collaborative machines?”

2. The Future of Mobility: The Ecosystem Takes the Wheel

The dream of autonomous vehicles is inching toward reality, but the mobility revolution is much broader. It’s a complete rethinking of how we move people and goods.

Key Shifts:

• Autonomous Vehicles Scale (Cautiously): Shared autonomous vehicles are already operating in cities like San Francisco and Phoenix. While timelines have slipped, companies like Waymo and Kodiak Robotics are proving the technology in complex urban and industrial environments.
• The Skies are Opening: The electric vertical takeoff and landing (eVTOL) industry is advancing toward certification. Companies like Archer Aviation and Joby Aviation are poised to begin limited commercial passenger operations, marking the beginning of urban air mobility.
• Electrification Everywhere: It’s not just cars. The electrification of everything from scooters and bikes to boats and industrial machinery is accelerating. Innovations like the Candela P-12 Nova, the world’s first electric hydrofoil ferry, show how new technologies can reduce energy consumption by up to 80%.

The Bottom Line: Success in mobility is no longer just about the vehicle; it’s about mastering the integrated ecosystem of software, connectivity, energy, and infrastructure.

3. The Future of Bioengineering: Programming the Building Blocks of Life

This is perhaps the most profound frontier. We are moving from discovering biology to engineering it, with AI as our co-pilot.

Breakthroughs to Watch:

• AI-Accelerated Discovery: The 2024 Nobel Prize in Chemistry was awarded for using AI to predict and design proteins. This is turbocharging drug discovery and the creation of new biomaterials, slashing R&D time and cost.
• CRISPR Comes of Age: CRISPR-based therapies have moved beyond clinical trials to become approved treatments for genetic disorders, heralding a new era of precision medicine that addresses the root cause of disease.
• The Bio-Economy Scales: Companies are moving from the lab to large-scale production. 21st.BIO is scaling precision fermentation for sustainable proteins, while GOOD Meat and UPSIDE Foods have received regulatory approval to sell cultivated chicken in the US.

The Bottom Line: Biology is becoming a predictable engineering discipline. This creates opportunities for sustainable products, personalized medicine, and entirely new material supply chains.

4. The Future of Space Technologies: The Final Economic Frontier

Space is no longer the exclusive domain of governments. It’s a rapidly commercializing sector that provides critical infrastructure for life on Earth.

The New Space Race:

• Plummeting Launch Costs: Reusable rockets from companies like SpaceX are driving down the cost to orbit, making it economically feasible to launch massive constellations of small satellites.
• Real-Time Earth Intelligence: A coming wave of up to 70,000 new satellites will provide unprecedented Earth observation. With hyperspectral imaging and AI, we can monitor climate change, track supply chains, and respond to disasters with near-real-time precision.
• Direct-to-Device Connectivity: Services like Starlink are enabling smartphones to connect directly to satellites, expanding global connectivity and closing the digital divide.

The Bottom Line: Space is becoming a utility. The businesses that win will be those that best integrate space-based data and connectivity into their core operations.

5. The Future of Energy & Sustainability: Powering the Future, Responsibly

The AI and digital boom is driving an unprecedented surge in electricity demand, making the energy transition both an environmental and economic imperative.

The Innovation Landscape:

• The Data Center Dilemma: Data centers are now one of the largest drivers of global power consumption, creating an urgent need for low-emission, reliable power sources.
• Next-Generation Nuclear: Small Modular Reactors (SMRs) promise to provide stable, baseload power with lower capital costs and faster deployment than traditional nuclear plants.
• Green Hydrogen & E-Fuels: These technologies are critical for decarbonizing “hard-to-abate” sectors like heavy industry, shipping, and aviation. While scaling challenges remain, innovation is rapidly improving the outlook.
• Advanced Solar: Companies like Oxford PV are commercializing perovskite tandem solar cells, achieving efficiencies far beyond traditional silicon panels.

The Bottom Line: The energy transition is a massive economic re-engineering project. Leaders must navigate a complex landscape of emerging technologies, supply chain constraints, and evolving policy to ensure their operations are both sustainable and powered.

The Engine of Convergence

The true power of these engineering frontiers isn’t in their isolation, but in their convergence. An AI-powered robot (Robotics) in a warehouse can be directed by a space-based GPS (Space) to move goods that will be loaded onto an autonomous electric truck (Mobility), all powered by next-generation solar cells (Energy).

Conclusion: Is Your Business Ready for the Combinatorial Age?

The technology landscape is no longer about watching a single trend. It’s about understanding a dynamic, interconnected ecosystem. Success will hinge on identifying which combinations of these trends can unlock new value in your industry, investing in the right talent and infrastructure, and building a culture of agile, strategic experimentation.

🔗 Links for More:

Read the full report on McKinsey website or NeoForm LinkedIn page.

📌 About NeoForm:

At NeoForm Business Partners, we empower enterprises to maximize sustainable growth and profitability through financial efficiency & agility with our transformational CFO services and strategic finance business partnering.

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