This article first appeared in Digital Edge, The Edge Malaysia Weekly on January 27, 2025 - February 2, 2025

As 2025 begins, the pace of technological innovation is set to accelerate, with artificial intelligence (AI) expected to continue taking centre stage. From the enterprise adoption of generative AI (Gen AI) to groundbreaking advancements in biotechnology, education and sustainability, we are seeing some key trends that are set to shape the world in 2025 and beyond.

Gen AI is poised to become a transformative force driving enterprise innovation. Global market research company Forrester believes that the evolving Gen AI landscape will help businesses generate new revenue streams, extensions and channels for business growth and reinvent themselves, forcing industries to restructure around the value generated by Gen AI.

We believe that in 2025, businesses across industries will accelerate the adoption of Gen AI, integrating it into their operations to further enhance productivity and unlock significant business value. This will include automating routine tasks, improving customer experiences, streamlining R&D processes and creating innovative applications inspired by emerging technologies.

For instance, companies are already leveraging Gen AI to deliver personalised content, such as tailored marketing campaigns and customer service. Drunk Elephant, a renowned skincare brand acquired by Shiseido, deployed Alibaba Cloud’s Gen AI-powered Qwen model in its customer chatbot to enhance customer interactions in China.

We anticipate this trend will gain further momentum in 2025. As enterprises embrace Gen AI, they will not only achieve productivity and efficiency gains, but also improve profitability by optimising workflows for better human-machine collaboration. This will enable businesses to develop new growth initiatives and remain competitive in an ever-evolving market.

The rise of open-source large language models (LLMs) is democratising AI access, enabling global developers, start-ups and researchers to create innovative applications more cost-effectively. For example, the Qwen model has become the foundation for over 78,000 derivative models, making it the largest open-source model ecosystem.

This trend is driving a surge of creativity, particularly in regions where access to cutting-edge AI was previously limited. Developers are utilising open-source LLMs to write code, create chatbots, automate customer support, translate languages and produce new forms of digital entertainment. For example, Thai developers with Typhoon, which is committed to building a stronger AI community for Thai language-speaking users, are leveraging Qwen to build and optimise a series of LLMs tailored for the local language and local culture.

By 2025, we expect to see a proliferation of smaller, vertical-specific LLMs built on top of open-source foundational models. These models will drive AI applications tailored to local languages, cultures and social needs, making AI innovation a truly global phenomenon. This democratisation of AI could empower countries to address their unique challenges and opportunities in their own markets.

A growing area of focus in AI development is reasoning models, which simulate human-like problem-solving and decision-making processes. These models power AI agents — autonomous systems capable of performing complex tasks with minimal human intervention — and are expected to transform industries such as manufacturing, logistics and autonomous driving.

Both academia and industry are exploring this new frontier. For instance, Alibaba Cloud recently introduced QwQ, an open-source reasoning AI model capable of advanced analytical tasks, multi-step reasoning and constructing intricate thought processes. Reasoning models such as QwQ unlock tremendous business value by analysing vast datasets, simulating future scenarios and recommending strategic decisions. For example, in logistics, reasoning models can enhance supply chains by predicting demand fluctuations and suggesting measures to mitigate disruptions.

In 2025, we anticipate reasoning models will further revolutionise industries requiring intelligent decision-making, from empowering robots in manufacturing to performing legal document analysis and financial risk assessments. They will improve operational efficiency while opening up new possibilities for solving complex problems in society.

AI is driving significant advancements in biotechnology, addressing pressing challenges in agriculture and public health. AI-powered tools are already changing the biotech landscape, enabling rapid virus detection, faster cancer screenings and smart crop breeding.

For instance, advanced medical diagnostic tools such as Alibaba’s Panda model have demonstrated superior accuracy in detecting pancreatic cancer, making cancer detection faster, more affordable and more reliable.

In 2025, with the continued development of reasoning models and AI agents along with other Gen AI progress, we expect to see even greater breakthroughs in life sciences. These advancements will unlock new opportunities to improve medical diagnosis, enhance food security and help us better prepare for global health challenges.

AI’s potential to drive social good is becoming increasingly evident, particularly in the field of personalised education. Leveraging AI, educators and parents can create tailored learning experiences for underserved communities and children with special needs.

For example, Alibaba’s Tongyi Wanxiang — a Gen AI text-to-image tool — has been used by parents in China to create customised picture books for children with autism spectrum disorder (ASD). By turning simple text prompts into engaging visual and auditory learning materials, these AI-generated books help children better express themselves and develop communication skills.

With the help of Gen AI, we expect personalised education advancing further, especially for children requiring special care. This demonstrates AI’s potential for a more inclusive society, offering solutions that empower underserved communities in a new way.

As climate change intensifies, the demand for green technologies is surging, with AI playing a pivotal role in developing innovative solutions.

By 2025, Gen AI-powered tools are expected to further enhance weather forecasting accuracy and expand their capability to cover more types of abnormal weather events. Additionally, AI will drive innovations in carbon capture, resource recycling and green manufacturing, enabling communities to better adapt to climate volatility and minimise environmental impact. For example, weather forecasting AI models such as Alibaba’s Baguan deliver highly accurate predictions, helping to mitigate the impacts of extreme weather conditions.

In the meantime, green computing is set to play a vital role in advancing sustainability practices and combating climate issues in the era of Gen AI. Recently, Alibaba Cloud revealed its next-generation data centre architecture, CUBE DC 5.0, which increases energy and operational efficiency with proprietary technologies such as wind-liquid hybrid cooling system, reducing deployment times by up to 50% compared to traditional data centre builds through prefabricated modular designs.

To meet the increasing and diverse need for high performance computing power driven by the global AI boom, we expect more new innovations in power architecture, cooling approach, data centre design and smart energy management in 2025, making high density and energy-efficient data centres more prominent.

As these trends unfold, we are entering an era where technology not only accelerates business growth but also addresses some of humanity’s most pressing challenges. If we can leverage these trends in a responsible manner, 2025 will become a year of transformative progress, paving the way for a more inclusive and sustainable future.

Kun Huang is general manager for Malaysia at Alibaba Cloud Intelligence

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