Published on the 27/08/2025 | Written by Heather Wright

AI underpins all…

Application-specific semiconductors, immersive-reality technologies, quantum, robotics and of course, agentic AI and AI are among the ‘baker’s dozen’ served up by McKinsey in their latest technology trends outlook of the tech that matters most for companies right now.

The 181 page report, now in its fifth year, is the result of analysis of activity – search engine queries, news articles, patents, research publications, equity investment and talent demand – around the technologies, with the strategy and management consulting company saying the trends have the potential to transform global business, driving innovation and addressing critical challenges across sectors.

No surprises that AI and agentic AI top the list, with last year’s generative AI and applied AI now rolled into one as AI solutions increasingly combine aspects of both. (Industrialised machine learning, the third AI aspect in last year’s report no longer features.).

And while AI is only two of the thirteen technologies offered up, its fingerprints are on many of the others. Technology Trends Outlook 2025 notes that while AI is a powerful tech wave on its own, it’s also a foundational amplifier of other trends.

“It’s impact increasingly occurs via a combination with other trends, as AI both accelerates progress within individual domains and unlocks new possibilities at the intersections – accelerating the training of robots, advancing scientific discoveries in bioengineering, optimising energy systems and much more.”

Rapid advances in AI’s underlying capabilities have made the long-term potential of AI ‘even more promising for businesses’, with the cost of deploying powerful models dropping sharply and smaller, domain-specific models providing more organisations and a wider range of devices access to AI.

AI is also the primary catalyst for application-specific semiconductors, which make their first appearance on the list, with McKinsey noting a slew of patents as innovations in semiconductors spike in response to exponentially higher demands for computing capacity, memory and networking for AI training and inference, as well as a need to manage cost, heat and power usage.

Agentic, meanwhile gets its own section, with McKinsey noting that while interest in agentic – as measured by news and searches – was relatively low in 2024, it’s growing faster than any other tech trend, with patents increasing quickly along with equity investment which hit US$1.1 billion in 2024.

Beyond AI, the report offers up two other categories of transformative trends: Compute and connectivity, which includes application-specific semiconductors, advanced connectivity, cloud and edge computing, immersive-reality, digital trust and cybersecurity and quantum; and ‘cutting-edge’ engineering, with its robotics, mobility, bioengineering, space technologies, and energy and sustainability tech.

McKinsey says immersive-reality technologies, which encompass augmented reality and virtual reality and include AR smart glasses, advanced haptic feedback and AI-powered enhancements to improve rendering, tracking and processing capabilities, have potential across many industries.

The report notes the use of augmented reality googles providing visual guidance for windfarm technicians, helping them maintain and repair complex turbine systems safely.

“While gaming and entertainment remain the sectors with the strongest adoption and most visible innovation, these technologies are also being used in other sectors for marketing, prototyping and simulating high-risk scenarios to improve training and safety.”

It’s an area though which remains in the experimentation zone, with organisations testing the function and viability of the technology with small scale prototypes, typically without a focus on near-term ROI. McKinsey says few companies are scaling or have fully scaled the technology.

Trust, meanwhile has moved to being a business-critical asset, with digital trust ‘the license to operate’.

“The companies that build it in by design will be the ones customers choose – and the ones that earn the backing of societal stakeholders.”

When it comes to quantum, the report notes there are a series of technical challenges that still need to be overcome before the transformative benefits of the technology can be unlocked.

And while AI has a broader reach across markets and sectors, quantum’s benefits are likely to be much narrower, with McKinsey pointing to chemicals, life sciences, finance and mobility as the industries likely to reap financial benefits.

For executives and IT teams, success going forward will hinge on identifying the high-impact domains in which they can apply the trends, investing in necessary talent and infrastructure and addressing external factors like regulatory shifts and ecosystem readiness, McKinsey says.

“By fostering collaboration, bridging ecosystem gaps and maintaining a long-term vision, leaders can accelerate adoption and position their organisations to drive the next wave of technological transformation.

“Those who act with focus and agility will not only unlock new value, but also shape the future of their industries and the future of today’s emerging frontier technologies.”