Omar Akar, Regional VP, META & CEE at Pure Storage, believes that 2025 will be the year that the AI bubble is going to burst, and outlined some other key tech trends that he seems emerging over the next 12 months. 
Right through the pandemic, supply chain disruptions and regional geo-political conflicts, IT has been the one segment that has been growing at an unshakable pace. Indeed, for 2025, Gartner projects that IT spending in MENA will once again rise by an appreciable 7.4%.
And while the US$230.7 billion set to be invested in IT projects through next year underscores IT’s significance as a fundamental enabler of business, there are signs that reality is beginning to set in.
As business leaders mould their organisations’ strategies for the year ahead, they will be well served to take stock of ongoing shifts in market dynamics. Though these may appear gradual, the sudden and dramatic rise of AI stands testament to how rapidly such movements can gain momentum and upend businesses.
So, for the savvy business leader, here are three key trends to consider when charting your organisations’ course for 2025.
2025 will see stricter selection on AI projects as bubble starts to burst
Organisations are going to be more selective on AI projects next year. While PwC’s Strategy&, sees the Middle East’s generative AI race as a US$23.5 billion “opportunity”, I anticipate companies will pull back spending before fatigue sets in.
I expect the market will realign. The existing growth could become unsustainable because projects aren’t delivering ROI and realism will set in. Many organisations aren’t going to be able to convince business leaders that they need to invest in new technology when existing AI or GenAI projects haven’t delivered the promised benefits. While FOMO is still a huge driver for investment, we expect this will be tempered in 2025.
Non-customised AI solutions will fall out of favour in 2025. RAG will become a non-negotiable inclusion for Middle East enterprises, and it will take over as the adopted method of implementing AI. As business leaders demand ROI from the speculative investments they’ve already made in AI, RAG will be crucial for success.
This is because it provides a standard approach to customisation, improving results and reducing the possibility of hallucinations, rather than building, training and fine-tuning individual models from scratch.
Sustainability goals will be put at risk by AI and incoming wave of data centres
As the demand for AI and associated data storage continues to grow, sustainability is once again going to be in the spotlight. As AI drove greater use of computing resources across the region, which had a negative impact on energy reduction goals, sustainability was sidelined. But following Egypt’s and UAE’s hosting of COP summits, it is rising up the corporate agenda.
How organisations view and implement sustainable practices is once again going to be on upper management’s radar. I foresee the following issues:
- More organisations will discuss their energy transition — how they are going to power the increased demand for data centres.
- As a method to highlight the impact of sustainability, Impact Accounting will become widely adopted at a senior level. As it focuses attention on environmental issues and associated costs, it will become the de facto means of calling out the benefits of sustainability initiatives in a language the C-Suite and board will understand.
- There will be a drive to build more data centres across many countries, as Middle East regulators continue to insist on data residency. However, how to power these and maintain both sustainability goals and ensure there’s enough power for powering homes and businesses will stay firmly in the spotlight.
Have we reached peak cloud?
There is a growing realism about the adoption of cloud. With increased expectations from regulation, more knowledge about the downsides, and geographical restrictions, 2025 could be the year we reach peak cloud.
On the regulation side, the Middle East could see DORA-like frameworks coming into force in 2025 and beyond, which will bring cloud service providers’ actions into focus. They will need to evidence the steps they take for compliance, for example, testing and resilience plans which are shared with regulators. Cloud Service Providers and Hyperscalers will be held accountable in a way they haven’t been before, and non-compliance will force remediation efforts across FSI industries. I expect some will be made an example of, to ensure tighter adherence to these new regulations.
Another element driving change is the ongoing disruption brought on by the Broadcom acquisition of VMware. In 2025 we will see if customers will accept their fate or adopt alternatives. Many organisations are still discovering what does and doesn’t work in terms of the other options out there and next year we’ll see if the alternatives can meet enterprise needs fully, or if organisational anger will subside and they stick with what they know.
Pragmatic Pioneering
As we look ahead to 2025, the IT landscape will continue to be dynamic and transformative. Yet, it is clear that the era of unchecked growth and speculative investments is giving way to one of strategic discernment. From the recalibration of AI ambitions to the balancing act between sustainability and data demands, business leaders must navigate a complex interplay of innovation and pragmatism. Success in this evolving environment will depend on adaptability, foresight, and a clear focus on delivering tangible value.
