Opinion
From hype to maturity: How AI is reshaping business and geopolitics
"If 2024 was the year of AI’s transition from hype to practical solutions, then 2025 will be the year of market-shaping regulations, new industry players, and deeper ethical and geopolitical debates," writes Ori Goshen, CEO and co-founder of AI21 Labs.
For the second year in a row, artificial intelligence dominated discussions at the World Economic Forum (WEF) in Davos. But this time, the tone was different. The initial excitement over AI’s potential has given way to a more pragmatic conversation—one focused on results. Companies are no longer just experimenting; they expect AI to deliver measurable business impact. Efficiency, automation, and real-world outcomes have replaced abstract enthusiasm.
AI is a transformative force reshaping industries, economies, and global power dynamics. Business leaders, researchers, financial executives, and policymakers gathered in Davos to discuss where AI is headed. While no one has all the answers, five key themes emerged from the discussions, meetings, and hallway conversations.
AI Agents: From Overhyped to Game-Changer
The “AI Agent" is one of the most talked-about terms in tech today. Since Russell and Norvig’s classic textbook in 1995, it has been central to AI discourse, though its meaning has evolved over time. The excitement surrounding AI Agents today comes from advancements in large language models (LLMs) and the potential to move beyond reactive chatbots to proactive, intelligent systems.
Many of today’s "agents" function as enhanced automation tools—capable of handling multiple steps but not yet fully autonomous. As businesses race to develop and deploy AI solutions under the “agent” banner, the definition remains fluid, often shaped more by marketing than by technical breakthroughs. Even at WEF 2025, there was no clear consensus on what qualifies as an AI Agent.
But the real transformation is on the horizon. The next wave of AI Agents will redefine existing workflows. Instead of acting as add-ons, they will become the backbone of business operations, driving innovation and unlocking new levels of efficiency. When that happens, AI Agents won’t just be a buzzword—they’ll be an economic engine.
AI Orchestration: Smarter Automation for Complex Workflows
One of the biggest takeaways from WEF 2025? AI adoption in enterprises is still in its infancy—only 6% of companies have fully integrated AI into their operations. The biggest hurdle? Accuracy and reliability in multi-step workflows.
LLMs excel at individual tasks but struggle with complex, multi-step operations where consistency and precision are critical. Two main approaches exist today: Static Chaining – Predefined AI workflows that offer control but lack flexibility, and LLMs as Autonomous Planners – More dynamic but unpredictable, often making errors without oversight.
The solution? Combine them. The future lies in hybrid AI orchestration, systems that dynamically plan task sequences while maintaining human oversight. Instead of treating AI as a "black box," the next generation of AI systems will offer real-time monitoring, adjustments, and optimizations, ensuring both flexibility and control.
WEF confirmed that the hybrid approach, which we’re implementing, will be the key to unlocking scalable, reliable AI automation.
Private AI: The Push for On-Prem AI Deployments
Discussions at WEF 2025 underscored the surging demand for private AI deployments, especially in critical industries like telecom, infrastructure, transportation, and energy. In sectors where regulations, privacy, and security concerns limit cloud adoption, organizations are increasingly turning to on-prem AI to maintain full control over their data.
However, private AI adoption has been slower than anticipated—not because of lack of interest, but due to hardware shortages. Many companies that ordered GPUs in early 2024 are only now receiving them, causing a delayed but accelerating wave of private AI deployment.
With hardware bottlenecks easing, we’re seeing a massive surge in on-prem AI adoption. Enterprises are now building their own AI infrastructure—leveraging cutting-edge models while maintaining data sovereignty. This trend is only going to intensify in the coming years.
AI and Geopolitics: A Fractured Landscape
If WEF 2025 made one thing clear, it's that AI is deepening global divides. The absence of representatives from China and Russia was a stark reminder of the growing geopolitical fault lines in AI development.
The contrast between Western and Eastern AI strategies is becoming clearer: The West emphasizes regulation, transparency, and ethical AI. The East prioritizes technological dominance and state control.
These differences aren’t just theoretical, but actually shaping global power dynamics. Some WEF participants raised concerns about AI exacerbating economic disparities and privacy issues, while others argued that AI is just a tool—its impact depends on who wields it.
The real challenge is striking a balance between innovation and responsible governance, without stifling progress. AI is already reshaping economies, labor markets, and national security. By 2026, these tensions will only intensify, forcing policymakers to make critical decisions: Will AI be a force for global good—or a tool for those who control it?
Looking Ahead to WEF 2026
WEF 2025 wasn’t just about forecasting the future—it was a reality check. It showed that we’re tackling the right challenges: AI orchestration, private deployments, and the balance between innovation and regulation.
While Israel remains a global AI leader, maintaining influence in this shifting landscape requires deep engagement with global policymakers and industry leaders.
If 2024 was the year of AI’s transition from hype to practical solutions, then 2025 will be the year of market-shaping regulations, new industry players, and deeper ethical and geopolitical debates.
AI is evolving, and reshaping our world. The challenge isn’t just to lead in AI innovation, but to ensure it integrates seamlessly into the global economy, business, and governance.
Ori Goshen, CEO and co-founder of AI21 Labs.
