STATE OF AI REPORT 2025.

The State of AI Report is the most widely read and trusted analysis of key developments in AI. Published annually since 2018, the open-access report aims to spark informed conversation about the state of AI and what it means for the future. Produced by AI investor Nathan Benaich and Air Street Capital.

25 min video overview:

Full slide deck:

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State of AI Report 2025

Research: Technology breakthroughs and their capabilities.
Industry: Areas of commercial application for AI and its business impact.
Politics: Regulation of AI, its economic implications and the evolving geopolitics of AI.
Safety: Identifying and mitigating catastrophic risks that highly-capable future AI systems could pose to us.
Survey: The largest open-access survey of 1,200 AI practitioners and their AI usage patterns. You can participate here.
Predictions: What we believe will happen in the next 12 months and a performance review of last year's predictions to keep us honest.

Key takeways from the 2025 Report include:

OpenAI retains a narrow lead at the frontier, but competition has intensified as Meta reliquinshes the mantle to China’s DeepSeek, Qwen, and Kimi close the gap on reasoning and coding tasks, establishing China as a credible #2.
Reasoning defined the year, as frontier labs combined reinforcement learning, rubric-based rewards, and verifiable reasoning with novel environments to create models that can plan, reflect, self-correct, and work over increasingly long time horizons.
AI is becoming a scientific collaborator, with systems like DeepMind’s Co-Scientist and Stanford’s Virtual Lab autonomously generating, testing, and validating hypotheses. In biology, Profluent’s ProGen3 showed that scaling laws now apply to proteins too.
Structured reasoning entered the physical world through “Chain-of-Action” planning, as embodied AI systems such as AI2’s Molmo-Act and Google’s Gemini Robotics 1.5 began to reason step-by-step before acting.
Commercial traction accelerated sharply. Forty-four percent of U.S. businesses now pay for AI tools (up from 5% in 2023), average contracts reached $530,000, and AI-first startups grew 1.5× faster than peers, according to Ramp and Standard Metrics.
Our inaugural AI Practitioner Survey, with over 1,200 respondents, shows that 95% of professionals now use AI at work or home, 76% pay for AI tools out of pocket, and most report sustained productivity gains, evidence that real adoption has gone mainstream.
The industrial era of AI has begun. Multi-GW data centers like Stargate signal a new wave of compute infrastructure backed by sovereign funds from the U.S., UAE, and China, with power supply emerging as the new constraint.
AI politics hardened further. The U.S. leaned into “America-first AI,” Europe’s AI Act stumbled, and China expanded its open-weights ecosystem and domestic silicon ambitions.
Safety research entered a new, more pragmatic phase. Models can now imitate alignment under supervision, forcing a debate about transparency versus capability. External safety organizations, meanwhile, operate on budgets smaller than a frontier lab’s daily burn.
The existential risk debate has cooled, giving way to concrete questions about reliability, cyber resilience, and the long-term governance of increasingly autonomous systems.