TMT Predictions 2025: Bridging the gaps

Eight gaps that mark 2025 as a “gap year” for TMT

1. The gen AI infrastructure and monetization gap. As we predicted last year, companies are spending tens of billions of dollars on chips and further hundreds of billions to build gen AI data centers for training and inference of gen AI models. While some companies offering gen AI enterprise software are seeing incremental revenues, the investment is 10 times (or more) higher than the return, at least for now. Those spending the most might suggest that the risk of underinvesting in gen AI is higher than the risk of overinvesting. But the gap persists and seems to be widening.
2. The gen AI data center electricity and sustainability gap. Proposed gen AI data centers require unprecedented amounts of power, preferably low carbon, which is creating a gap between their needs and the capacities of electrical grids, and companies’ sustainability targets. Much is being done to close it by hyperscalers, chip companies, and utilities around the world, but the gap is expected to remain in 2025.
3. The gen AI gender gap. Women are less likely than men to use gen AI tools for both work and play. Some of this is due to lack of trust, but women’s usage of gen AI is expected to catch up to men’s usage … within the year in some markets.
   
4. The gen AI deepfake trust gap. The proliferation of deepfake gen AI content (images, video, and audio) is making it harder for consumers, as a society, to trust their own eyes and ears. That gap needs to be bridged by the gen AI ecosystem comprehensively and immutably labeling gen AI content, as well as reliably and accurately detecting fake images in real time. The marginal cost of creating convincing deep fakes is falling, and the cost of detection needs to fall at an equivalent pace to help close the gap.
5. The studio gen AI usage gap: Many expect large studios to be using gen AI for content production, and some are, but there is a gap between those expectations and reality. Many are cautious about challenges with intellectual property inherent to generative content, but they are keen to gain enterprise capabilities that can reduce time, lower costs, and expand their reach. 
6. The autonomous gen AI agent gap. The prospect of autonomous bots that can consistently and reliably complete discrete tasks and orchestrate entire workflows is tantalizing. Agentic AI pilots are launching in 2024—will they reach widespread adoption in 2025?
   
7. The streaming video gap. Many media and entertainment companies assumed consumers would “buy and hold” multiple subscriptions. Instead, customers are looking to cut costs by bundling their favorite subscriptions and dropping others. We now see the number of services per household not merely stagnating but shrinking, and streamers increasingly relying on bundling to help fill the growth gap and using other parties to aggregate and distribute their content.
   
8. The cloud spending gap. One of the original selling points of using the cloud was the claim that it was cheaper, but in reality, spending is often decentralized and poorly controlled. Some buyers are leaning into FinOps to bridge the gap between promised cost savings and current spending to manage their cloud spending and potentially save billions.

2025 topics

Here's a quick look at our main topics, plus those from our two new sections:

Women and generative AI: The adoption gap is closing fast, but a trust gap persists

For women to reap the full rewards of gen AI, tech companies should work to increase trust, reduce bias, and strive for more representative workforces

Deloitte predicts that women’s use of generative AI will equal or exceed that of men in the United States by the end of 2025. Although their use of gen AI was half that of men’s in 2023, their pace of adoption suggests they’ll reach parity in the United States within the next year and in many European countries within one to two years. Despite accelerating adoption, women express less trust that gen AI providers will keep their data secure—which may inhibit their full engagement and their gen AI spending. To help overcome this, tech companies should enhance data security and data management practices, mitigate AI bias, and improve women’s representation in their AI ranks.

As generative AI asks for more power, data centers seek more reliable, cleaner energy solutions

The tech industry should optimize infrastructure, rethink chip design, and collaborate with electricity providers to help secure a more sustainable future for data centers

AI-driven data center power consumption will continue to surge, with Deloitte predicting data centers will only make up about 2% of global electricity consumption by 2025. This growth is expected to emerge from high-density data center infrastructure to support massive computing power and cooling needs. But regulatory, infrastructure, and cost issues are posing challenges for electricity generation and the grid to keep pace with data centers’ unprecedented demand for 24/7 reliable energy. Technology and electric power industries can jointly address these issues by increasing the use of carbon-free sources, improving energy efficiency in gen AI chips and algorithms, and re-balancing compute-intensive AI workloads.

Ambitious stadium projects aim to bridge public-private investment goals

Sports owners transform stadiums into destinations, driving socioeconomic growth, community engagement, and revenue diversification

The sports industry has repeatedly demonstrated its ability to act as a catalyst for economic and social development, with stadiums largely at the epicentres of their communities. Investment in sports infrastructure is seeing an upward trend, as these developments often instigate wider returns to both the public and private sectors. With growth as a common goal between the public and private sectors, governments and communities can work with sports investors to provide supplementary investments in infrastructure and supercharge the socioeconomic impact of sports, enhance fan engagement, and diversify revenue streams for the organization. In 2025, we expect to see new stadium developments continue at pace, with almost half of these new projects expected to take place across North America and Europe.

Autonomous generative AI agents: Under development

Autonomous gen AI agents—agentic AI—could increase the productivity of knowledge workers and make workflows of all kinds more efficient. But the “autonomous” part may take time for wide adoption.

Deloitte predicts that in 2025, 25% of companies that use gen AI will launch agentic AI pilots or proofs of concept, and this figure will grow to 50% in 2027. Agentic AI has the potential to complete complex tasks autonomously, improving the productivity and efficiency of knowledge workers. Some of today’s most promising applications include software development, customer support, cybersecurity, and regulatory compliance. The pace of improvement for agents is accelerating, but like most new technologies, widespread use will take time. That said, some agentic AI applications, in some industries, and for some use cases, may see actual adoption into existing workflows in 2025.

Deepfake disruption: A cybersecurity-scale challenge and its far-reaching consequences

As the effort to detect and combat fake content escalates, the costs of maintaining a credible internet may fall on consumers, creators, and advertisers alike

As AI generates increasing amounts of online images and video, questions around content authenticity and the potential harms of fake content grow more urgent. Online platforms, tech companies, and media players are taking two complementary approaches: using technology (often AI) to detect and flag fakes and using cryptographic metadata to assure provenance of authentic media assets. Deloitte predicts that this market will follow a similar pattern as that of cybersecurity, with bad actors finding ways to thwart detection tools and industries collaborating to confirm the credibility of at least some online content.

Cloud gets lean: ‘FinOps’ makes every dollar work harder

Enterprise cloud spend is growing, and using FinOps strategies can make each dollar work harder. Companies can save money, boost value, and build cross-functional cohesion.

Global cloud spend is set to top US$825 billion in 2025,¹ but ask an organization’s leaders what they spend, and it might be difficult for them to answer. However, in 2025 Deloitte predicts more companies than ever will turn to “FinOps”, a set of tools and strategies to measure and optimize cloud spend, to save an estimated US$21 billion. Companies can start simple, acting to reduce cloud waste, take advantage of discounts, and proactively right-sizing compute, network, and storage. But advanced companies could also drive cultural change, such as making business units financially accountable for their portion of the cloud bill. The goal is a “cloud unit economics” model—linking each dollar of spend to the business value it generates, so that companies can make more effective decisions about IT.

On-device generative AI could make smartphones more exciting—if they can deliver on the promise

With specialized chips and extensive mobile OS integration, smartphones could become smart—even intelligent. Will users embrace the new approach?

Deloitte predicts that in 2025, global smartphone shipments will see a modest lift to around 7%, up from about 5% annual growth in 2024. Some of this lift will be due to the device upgrade cycle, which has been down the past two years, and some will be from early adopters seeking new generative AI capabilities. Smartphones with on-device generative AI capabilities will test the value of features like intelligent assistants and conversational interfaces; the capabilities of small models running on-device; and the business models seeking economic value from the capital intensity of the generative AI buildout. There is excitement about generative AI, but can the technology deliver on its promises, and will users embrace a new way of interacting with the most widely used consumer device?

Large studios will likely take their time adopting generative AI for content creation. Social media isn’t hesitating.

Hollywood (and others) may be cautious about using gen AI for content creation, but they will likely be quicker to adopt it for operations and distribution

In 2025, Deloitte predicts that the biggest TV and film studios—especially those in the United States and European Union—will be cautious in adopting generative AI into their creative workflows, with less than 3% of their production budgets going to these tools. But we also predict that operational spending will expand by 10% to integrate generative AI enabled tools for more bread-and-butter functions like contract and talent management, permitting and planning, marketing and advertising, and localization and dubbing of content that can expand their reach into diverse global markets. This approach can help studios slow the potential disruptions that gen AI can pose to talent and content, while more quickly adopting gen AI tools that can help reduce costs and accelerate performance across their businesses.

Reevaluating direct-to-consumer: The shift toward video aggregators

Video content creators may need more distributors to reach their total addressable market

Consumers are expected to continue to stack streaming video services and have more than one standalone subscription at a time in 2025, but Deloitte predicts that the stack is about to get shorter. According to Deloitte surveys, after reaching more than four services per consumer in the United States and over two in most European markets in 2023 and 2024, we appear to have passed the peak, and the number of standalone services will slowly decline in most markets. Instead of consumers directly subscribing to each content provider’s service, there will likely be increased aggregation, where intermediaries—ranging from telcos to grocery stores to tech platforms to streamers themselves—combine multiple content sources in a single package. This trend is likely a win for many of the players, keeping costs under control and creating a stable and sustainable streaming ecosystem for 2025 and beyond.

Wireless telecom consolidation speeds up … where regulators allow

In many markets, smaller wireless telecoms see slow growth, low profits, and have debt to repay. M&A, specifically combining assets or even entire consumer-facing companies, may help where it gets approved by regulators.

In some markets, especially Europe and Asia, there is an increasing perception that wireless markets are too fragmented, subscale and unsustainable, with the smaller third and fourth place operators not able to invest in networks over the long term. Although these markets have historically kept the number of operators high, recent conversations have seen opportunity to allow or even encourage consolidation. Deloitte predicts that although it is expected to be a slow process, and regulators will have their conditions, there will be an increased pace of consolidation, beginning in 2025 and continuing, creating a more viable and sustainable wireless ecosystem, especially in smaller markets.

Updates

This year we’re looking at seven previous predictions to see how we did, and what the latest developments are:

Generative AI comes to the enterprise edge: ‘On-prem AI’ is alive and well

Owning their own servers gives companies a more private, secure, flexible, and possibly cheaper IT environment for AI

Deloitte predicts that although gen AI via cloud will continue to be the dominant option in 2025, about half of the enterprises worldwide will add AI data center infrastructure on premises, primarily to protect their IP and sensitive data, comply with data sovereignty or other regulations, and save costs. Deloitte’s 2024 State of Generative AI in the Enterprise Q2 survey noted 80% of companies with “very high” AI expertise reported spending more on AI in the cloud … but 61% are investing more in their own hardware. Enterprise gen AI will likely be a hybrid approach, with enterprises doing some in the cloud, and some on premise.

(Re)defining the investment case for women’s sports

Rising women’s sports revenue fuels investor interest and valuation records

The increasing professionalization and commercialization of women’s sports around the world is garnering the attention of fans, sponsors and—critically—investors. In 2024, we predicted the women’s elite sports market would generate over $1 billion in revenue. In North America, clubs are recognizing record valuations, from Angel City FC in the National Women’s Soccer League at a valuation of $250 million² to Las Vegas Aces in the Women’s National Basketball Association at $140 million.³ Elsewhere, organizations are creating innovative structures to channel investment into their women’s teams and emphasizing strategic growth, independent leadership, and commercial opportunities. In 2025, we expect to see an expanding group of investors—including institutional investors, private equity and high net worth individuals—take more note.

Fixed wireless access: Contrary to popular opinion, adoption may continue to grow 

With US FWA net adds likely being slightly lower than last year, and some markets not expected to take off until 2026 … there may be pockets of unrealized or potential growth out there, both in the US and globally

Fixed wireless access (FWA)—when consumers and enterprises get their home broadband over a fixed cellular device (mainly 5G) rather than via wires—has been the 5G growth story over the last few years in the United States, with well more than 10 million homes expected to be connected by the end of 2024. However, growth is slowing, with the first quarter of 2024 net additions lower than Q1 2023, and a potential slowdown anticipated in 2025. Despite this, Deloitte predicts global FWA net additions will rise by 20% annually in 2025 and 2026 (in line with our 2022 Prediction on FWA), driven by growth in new enterprise FWA and markets that are not as large as the United States or India individually but still add up to millions in new subscriptions annually.

5G standalone appears to be at a standstill: Will 6G run late? 

Telecoms reassess investments in 5G standalone and delay 6G progress amid ROI concerns

The deployment of 5G standalone networks is progressing more slowly than expected. Telecom companies may be hesitant to invest heavily in this next generation of 5G in part due to underwhelming returns on their existing 5G investments, making the rollout of 6G seem further away than ever. In 2022, Deloitte Global predicted that the number of telcos investing in 5G SA networks would double from more than 100 operators in 2022 to at least 200 by the end of 2023, but that has not happened: as of March 2024, only 49 operators (out of 585 who have launched 5G globally) have deployed, launched, or soft-launched 5G SA networks.⁴ In 2025, Deloitte predicts that fewer than 20 additional networks will be upgraded to standalone, keeping 5G SA at around 12% of all 5G deployments.

Open RAN mobile networks and vendor choice: Single vendor now, multivendor when? 

Open RAN's journey toward a diverse, multivendor ecosystem is marked by slow growth and complex challenges

Open Radio Access Network (Open RAN) aims to democratize networks by providing mobile network operators (MNOs) who build RANs with greater choice and more flexibility. In 2021, Deloitte predicted that global active Open RAN deployment would double from 35 to 70. We were too optimistic: as of March 2024, the ongoing Open RAN deployments and trials stand at 45, with only two networks globally being multivendor Open RAN.⁵ The transition towards a diverse, multivendor ecosystem is proving slower and more complex than initially anticipated, and realizing true multivendor Open RAN may take a while. Deloitte predicts that no additional multivendor Open RAN networks will be deployed or announced in 2025.

Despite quantum’s slow start, don’t be slow to start your defense against it

Quantum drug discovery and financial modeling are likely several years away, but the time needed to upgrade cyber defenses for the quantum age likely necessitates prompt action

As Deloitte predicted in past reports, quantum computers remain works in progress, with few real-world use cases where they offer a computing advantage, at least for now. But the threat of “harvest now, decrypt later” attacks, where threat actors gather encrypted data, store it for years, and then unlock it with cryptographically relevant future quantum computers at some point has reached a tipping point. Deloitte predicts that the number of companies, and the dollars spent, working on implementing post quantum cryptography standards will quadruple in 2025 compared with 2023. Post-quantum cryptographic solutions are expected to span the gamut in 2025, from enterprise and hyperscalers to consumer smartphones and messaging services.

RISC-V: Closing the geopolitical gen AI loophole

An open-source alternative to proprietary chip design is gaining popularity among CPU designers. Its potential role in gen AI for markets under export restriction is a new twist for a new technology.

As predicted in Deloitte’s 2022 Global TMT Predictions report, open-source RISC-V (pronounced risk five) CPU chips revenues are expected to be close to US$1 billion by 2024. And RISC-V based SoC shipments could be close to two billion units. But in a new development, there are discussions in the United States about restricting RISC-V chips exports, as it involves potential national security risks, given how China is “making significant investments in RISC-V chip design architecture” to undermine US export controls and “leapfrog” US technological leadership in chip design. Gen AI servers need both GPUs (already under various export restrictions) and CPUs to control data flows. Closed-source CPU architectures are already under US export restrictions, and therefore, restricting RISC-V based designs may close an apparent alternative.

Rising trends

Keep your eye on these newly emerging trends. We predict they could soon become the center of attention, transforming the conversation and shaping the future of the industry:

Generative AI and cyber: Big risks, but big opportunities too

Recognizing generative AI's potential for enabling both threats and cyber solutions, cybersecurity professionals are exploring ways to harness its power to counter emerging risks and help fortify the technology environment

From the 2024 Deloitte-NASCIO Cybersecurity Study, nearly three quarters of security experts surveyed said the cyber threat from AI was high. Gen AI-based cyberattacks look like they will have doubled or tripled in 2024, and Deloitte predicts they will grow again in 2025, used by threat actors writing malicious phishing emails, deepfakes, or software code for malware attacks. Tech companies who make gen AI tools will likely develop guardrails to prevent malicious use in 2025. While gen AI tools can be used by threat actors for malicious purposes, the same tools can also be used by defenders to help improve security processes, monitoring, and risk management.

Silicon building blocks: Chiplets could move Moore’s Law forward

Chiplets promise to deliver more flexible, scalable, and efficient systems for AI and high-performance computing environments, at higher yields

Chiplets—a heterogeneous technological architecture to develop and package semiconductors—enable high-speed data transfers, reduce latency, and help optimize PPA (power, performance, and area). Deloitte predicts worldwide advanced packaging revenue based on chiplets will more than double from an estimated US$7 billion in 2021 to reach US$16 billion in 2025. Chiplets are already used and explored in some of the fast-growing markets such as AI accelerators (especially generative AI), high performance computing, and telecommunications applications. They’re enabling the semiconductor industry to continue increasing performance and yield.

B/OSS: Telcos modernize their business and operational support systems software

Telcos’ back-end business and operations software market is growing slowly but modernizing it—by adopting SaaS and microservices architecture, moving to the cloud and more—is a hot spot of growth for software vendors and an opportunity for telcos to do more with 5G, fiber, and AI

Historically, telcos maintained separate IT systems: business support systems (BSS) for customer orders, customer relationship management (CRM), and billing, and operational support systems (OSS) for order management, network inventory, and operations, often custom-built and hardware defined. These systems were typically on-premises and composed of vertical, siloed solutions. However, by 2025, many telcos are expected to modernize and integrate these systems, driven by evolving customer expectations and new digital revenue streams. Deloitte predicts that the global B/OSS market will reach $70 billion by 2025, growing at 5% annually. Cloud-based solutions and software-as-a-service offerings are expected to grow significantly faster, at 22% and 18% annually. Most of the growth in the next few years is expected to come from the Americas, Middle East, North Africa, and emerging Asia-Pacific regions.

Silicon photonics: Gen AI communicates at lightspeed

Propelled by the demanding requirements of gen AI, optical devices on silicon are stepping out of research labs and into the limelight of data centers

Deloitte predicts that sales of silicon photonics chips used as optical transceivers will grow at a compounded annual growth rate of 25% from 2023 to 2025 to reach US$1.25 billion in 2025. These chips allow gen AI data centers to communicate at lightspeed, use components that are smaller and cheaper, consume less energy, and produce less heat than the traditional alternatives. In 2025, the main driver of silicon photonics adoption is expected to be in data center applications, specifically for those running gen AI training and inference—especially where data needs to travel anywhere from 10 cm to 10 meters between chips, trays, and racks.