Ben Smith, president of digital and analytics at global consultancy Kearney, has witnessed several significant enterprise technology shifts throughout his career. The first change came with the advent of the PC, followed by the client-server model, the HTTP browser and the smartphone.

Analyzing the market at the end of 2024, he said the AI ​​boom “is bigger than all of them.”

“I think it’s going to lead to a lot of craziness, like we saw between 1995 and 2004,” Smith told TechRepublic, referring to the Internet boom and the rise of Google. “So from a supplier perspective, this is a unique time. »

What does competition between technology providers hold for us in the AI ​​era? And what should organizations do about it? Smith and Anshuman Sengar, heads of digital and analytics for Asia Pacific at Kearney, outlined the key trends that will shape the market through 2025.

The Big Forces Shaping the Future of Enterprise AI

Kearney experts say five forces will shape AI by 2025.

A battle for regulatory advantage between large and small players

Incumbent and regulatory capture occurs when established companies in a market use their influence over regulatory agencies to shape rules that favor existing business models and restrict competition. Regarding the big players in the AI ​​market, Smith explained that there is “a lot of effort to create fear in the market so that incumbents are better positioned” for the future.

As incumbents seek to reduce the risk of being disrupted by others moving more quickly, Smith said that regulatory agencies in the EU and US also demonstrate an “anti-acquisition” reluctance. This can create an environment for start-ups and challengers to build businesses and grow rather than being acquired by larger organizations seeking to dominate.

Sengar noted that there is innovation potential for start-ups in the Asia-Pacific region at the application layer, leveraging AI engines built into major platforms. He said local innovators, as well as companies like banks, through their own venture funds, have a role to play in the face of competition from large global technology companies.

A hunger for semiconductor capacity for data centers for AI computing

Smith said the company is experiencing the “largest off-cycle boom in semiconductor manufacturing facilitiesor factories, which we have seen for a long time. Nationalism and governments are driving this surge as many build large data centers for AI computing.

For AI users, this change will result in “a massive drop over the next 12 to 24 months” in the cost of a token, making AI less expensive.

In the Asia-Pacific region, the search for capacity is reflected in large data center deals, such as private equity firm Blackstone’s acquisition of regional data center company AirTrunk for $24 billion Australians. Sengar said companies across Asia are investing in developing data facilities in Indonesia and he expects India to launch its manufacturing capacity soon.

A desire to understand, unpack and use data for the benefit of AI

Smith highlighted the importance of data in the emerging dynamics currently unfolding in the AI ​​market. He noted that various ecosystem players are working to determine the ownership and use of data in an AI context, whether the data resides within a company or externally.

“I think the market is much more sophisticated this time around than when the Internet first came along,” Smith said.

Unprecedented capital intensity funds the AI ​​boom

According to Smith, the capital intensity of AI – especially in an environment of high global interest rates – is an important factor for tech players looking to gain an advantage in the field.

“If you look at the development of telecommunications or the development of fiber optics between 1995 and 2002… the amount of capital deployed in GenAI data centers overwhelms all of that by multiple factors. I mean, you’ll see data centers that cost hundreds of millions of dollars compared to the fiber optic deployments that we’ve seen.

Smith predicts that in the next few years the world will see its first data center worth US$1 trillion, which he hopes will be built either in the US market or in China.

A geopolitical environment impacted by AI

AI is linked to national economic security and national defense, which differentiates it from previous technological innovations. Smith said this has created a “strange geopolitical environment,” in which AI is more of a political issue than the internet because of its national security implications.

Three tips for navigating the forces shaping AI

Kearney experts advise organizations to consider investing and implementing AI based on their business and industry. Smith cautions against getting caught up in the AI ​​hype, while Sengar suggests that data can be managed as a priority.

1. Avoid pursuing too many AI use cases

Smith said a dangerous path would be for companies to test all AI use cases. Instead, he said organizations should prioritize only the use cases that are most important to the business today. While some commercial use cases can be effective, they can also be much cheaper to achieve when the cost of an AI token drops, so organizations may be better off waiting in some cases.

2. Will AI really change your industry?

Management teams and boards should ask themselves whether AI will fundamentally change the basis of competition in their sector. If so, then they should act quickly, Smith said, giving the example of the drug discovery and insurance markets, where he said AI is likely to have a huge impact on business competition. If not, he believes investing heavily in AI, especially now at higher prices, could prove a mistake.

3. Don’t wait to regain control of your data

Organizations can act immediately to take control of their datawhether they are actively interested in AI now or choose to wait. Sengar said businesses in APAC are struggling with their data, including the quality of customer data.

“Taking control of your data, especially customer data, and making sure you understand what you’re capturing and that it’s secure is something you don’t need to wait for,” Sengar said.