AI in 2024: Year in Review and Predictions for 2025

The past year has been transformative for artificial intelligence. From groundbreaking advancements in AI models to the rise of agentic systems, 2024 has set the stage for an even more exciting 2025. Let’s dive into the key developments of 2024 and explore what the future holds for AI.

Part I: 2024 Year in Review

OpenAI at the Forefront

OpenAI continued to lead the charge in AI innovation in 2024. The release of GPT-4 in May marked a significant milestone as the first frontier multimodal model capable of understanding and generating content across text, images, and video. This was followed by the launch of o1 in September, along with its lighter counterpart, o1-mini, and the announcement of o3 in December.

One of the most notable achievements was OpenAI’s Sora project, which revolutionized video generation. Announced in February and enhanced with Sora Turbo in December, this technology demonstrated unprecedented capabilities in creating realistic video content from text descriptions.

Agentic AI and AI Assistants

Rather than replacing jobs, AI in 2024 focused on enhancing human productivity through innovative tools and assistants. Google introduced several groundbreaking projects, including Astra, an AI assistant for phones and smart glasses, and Mariner, a Chrome extension that enables Gemini to interact with your browser. These tools represent a shift from simple chat interfaces to interactive agents that can understand and manipulate our digital environment.

Anthropic also made waves by enabling Claude to use computers the way humans do—viewing screens, moving cursors, and interacting with interfaces. This development opened new possibilities for AI assistance in everyday computer tasks.

For developers, tools like Github’s Copilot and Cursor AI have been game-changers, supercharging productivity by handling routine tasks and suggesting improvements. While autonomous coding agents like Devin and Github Workspace are still evolving, they are paving the way for a more efficient development process.

AI Regulation

2024 saw significant progress in AI regulation, particularly with the EU AI Act. This groundbreaking legislation established the first comprehensive framework for AI regulation, balancing innovation with safety and ethical concerns.

Part II: Looking Ahead to 2025

Small, Specialized Models

While decoder-only models like GPT and Claude have dominated headlines, encoder-only models are gaining traction. The release of ModernBERT just before the end of 2024 marked a significant advance in this space. These models are particularly crucial for Retrieval-Augmented Generation (RAG) setups, excelling at information retrieval and classification at a lower cost.

In 2025, we can expect a rise in small, specialized models fine-tuned for specific tasks. When used in conjunction with agentic workflows, these models will enable powerful and resource-efficient AI systems.

Multimodal Models and Test-Time Compute

Multimodal capabilities will see significant advances in 2025, with AI systems becoming more adept at processing and responding to various forms of input—text, voice, images, and video—simultaneously. This will make AI interactions feel more natural and contextually aware.

The concept of test-time compute—giving models more time to think—emerged as a game-changer in 2024 and will likely become more prominent in 2025. Frontier models like OpenAI’s o3 are already crushing reasoning, math, and coding benchmarks, outperforming humans in complex tasks.

Interestingly, even small edge models are surpassing the performance of larger models when given more processing time. For instance, Llama 3.2 3B outperformed Llama 3.1 70B in the Math-500 benchmark using a test-time compute strategy of 256 iterations.

The Evolution of AI Regulation

Following the EU’s lead, more regions are likely to implement AI regulations in 2025. Major tech companies are actively calling for regulation, potentially as a strategy to shape the regulatory environment and raise barriers to entry for competitors.

Conclusion

2024 has been a year of remarkable progress in AI, with advancements in models, tools, and regulation. As we move into 2025, the focus will shift toward more specialized and efficient AI systems, improved reasoning capabilities, and a continued emphasis on productivity-enhancing tools.

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