Today’s Brief

• AI Market Growth set to surge 35% in 2025 with a 41% CAGR through 2028

• Global Data Authorities unite on landmark AI privacy framework

• New York's AI Disclosure mandate targets workforce displacement

• AI Investment Strategies pivot toward outcome-based models and edge deployments

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AI News

AI Market Set for 35% Growth in 2025: Reshaping Business Decisions and Operations

The Brief: A recent Global Data report titled "2025 Enterprise Predictions" forecasts significant AI-driven business transformation, with the AI market expected to grow 35% in 2025 compared to 2024 and maintain a 41% compound annual growth rate through 2028. The report highlights how various AI technologies will reshape business processes, decision-making, and operational strategies across industries.

The details:

• The AI market will maintain robust growth with a 41% CAGR from 2023-2028, with predictive AI continuing to dominate despite generative AI's rising prominence.

• Generative AI faces challenges regarding the substantial investments required for training and operation, raising questions about long-term financial viability.

• Agent AI systems, which can complete complex tasks autonomously, will accelerate enterprise adoption of generative AI by better understanding human intentions.

• Small Language Models (SLMs) will gain traction for local or edge deployments due to lower processing requirements and customization benefits for real-time applications.

• Organizations will prioritize robust data management and governance strategies to scale AI effectively while protecting sensitive information.

• AI consulting pricing models will evolve to become more outcome-based, linked directly to project deliverables and timelines.

• Specific business applications include enhanced customer experiences, fraud detection in finance, and process optimization across industrial, healthcare, and education sectors.

Why it matters: This forecast signals that AI is moving from experimental to essential in business operations, requiring executives to develop realistic implementation roadmaps with measurable impacts. Companies should focus on strengthening data management infrastructure, exploring Agent AI and SLMs for specific use cases, and preparing for the shift toward outcome-based AI consulting models that will fundamentally change how technology services are procured and evaluated.

Global Data Authorities Unite on AI Privacy: Five Nations Sign Landmark Framework

The Brief: On February 11, 2025, data protection authorities from the UK, Ireland, France, South Korea, and Australia issued a joint statement establishing a collaborative framework for trustworthy AI data governance. This landmark agreement acknowledges both AI's transformative potential and its significant privacy risks, committing the authorities to develop consistent standards that balance innovation with robust data protection.

The details:

• The statement recognizes AI's immense opportunities alongside significant risks to fundamental rights including data protection, privacy, and potential for discrimination and misinformation.

• Data protection authorities from five major economies (UK, Ireland, France, South Korea, and Australia) have formally committed to a coordinated approach to AI governance.

• The agreement focuses on developing clear standards for lawful processing of AI training data across jurisdictions, whether based on consent, contractual necessity, or legitimate interest.

• Signatories commit to establishing proportionate safety measures based on scientific evidence and tailored to diverse AI use cases.

• The authorities plan to implement regulatory sandboxes and best practice sharing to reduce legal uncertainties while maintaining privacy protections.

• The statement acknowledges AI's complex ecosystem spanning multiple sectors (health, public services, security, HR) and involving numerous global stakeholders.

• The authorities will strengthen cooperation with competition, consumer protection, and intellectual property regulators to ensure consistent regulatory frameworks.

Why it matters: This unprecedented coordination between major international data protection authorities signals the emergence of a more unified global approach to AI regulation. Organizations developing or implementing AI systems should monitor these evolving standards closely and prepare for increased scrutiny of their data governance practices. Companies should prioritize implementing privacy-by-design principles from the earliest planning stages of AI projects and develop robust internal data governance frameworks that align with these emerging international standards.

NY Governor Unveils Landmark AI Displacement Disclosure Requirement

The Brief: On January 14, 2025, New York Governor Kathy Hochul announced a new proposal requiring employers to disclose when artificial intelligence tools contribute to mass layoffs or facility closings. This initiative, which will be enforced through the New York State Department of Labor, aims to increase transparency around AI's impact on employment and gather data on how intelligent technologies are reshaping the workforce.

The details:

• The disclosure requirement will apply to employers covered by New York's Worker Adjustment and Retraining Notification Act (NY WARN Act), which has stricter standards than its federal counterpart.

• Employers will need to specifically indicate in their NY WARN Act notices whether the implementation of AI tools replacing employees contributed to layoffs.

• The NY WARN Act already requires 90-day advance notice of closures and layoffs (compared to 60 days under federal law) and applies to employers with 50+ employees (versus 100+ under federal law).

• Governor Hochul acknowledged AI's business benefits for efficiency and customer responsiveness while expressing concern about potential negative workforce impacts.

• The initiative's primary goals are to increase transparency, gather workforce impact data, and ensure AI integration creates an environment where workers can thrive.

• The NY Department of Labor has not yet announced a timeline for implementing this new requirement.

• Legal and HR leaders are advised to understand how their organizations are automating processes through AI and the implications for staffing requirements and employee morale.

Why it matters: This groundbreaking initiative represents one of the first government actions specifically addressing AI-driven workforce displacement, potentially signaling a broader regulatory trend. Companies should proactively audit and document how AI tools are affecting their workforce planning decisions, as similar requirements may expand to other jurisdictions. Organizations implementing AI solutions should develop comprehensive transition plans for affected employees, including reskilling opportunities, to mitigate negative impacts while still capturing AI's efficiency benefits.