The Strategy Page: AI Arms Race Edition

At a glance:

1. Gartner Tech Trends
2. AI Tools Gaining Steam
3. Video: Gartner’s Top Strategic Tech Trends for 2025
4. Podcast Recommendation – Dividend Cafe: The Week AI Became Questioned
5. The Cost of Money is Global
6. Video: Jerome Powell EOCM Meeting Presser

Markets moved violently on January 27th following the news that China upstart DeepSeek, a large language model, was “trained” for only $6 million. Sure, and the Dodgers aren’t signing free agents.

Later it was revealed that OpenAI engineers reported unusual mining of their models online, as if a competitor was up to something sketchy. Hmm. Is there any doubt about what’s going on here?

AI is a force multiplier. There’s widespread concern that the Chinese could achieve AI dominance, translating to military dominance. One reason why DeepSeek’s rise shocked the senses is that the U.S. had built a formidable lead in large language models. The undercurrent isn’t that DeepSeek is better—only that it was cheaper to launch. But perhaps we shouldn’t be comparing the launch speed of new models with those that launched two years ago. What’s relevant is DeepSeek’s performance vs. ChatGPT (and others) today.

Yet the combination of OpenAI with Microsoft investment, and Nvidia chips with competition from Google, Apple, Tesla and others, is unmatched. The Chinese are behind.

The most valuable companies in the world, including Apple, Nvidia, Google, and those that leverage technology such as Visa and Salesforce, are based within a 30-mile radius of San Francisco. The new Stargate initiative focuses on building data centers that will fuel the AI revolution and provide the impetus for investment and innovation. Long story short, our animal spirits have prevailed once again and the market completely overreacted, losing $593 billion in value. This is a time to pause and reflect.

Gartner Tech Trends

Today, only one in three businesses is utilizing AI in a material way.

In a recent Gartner Keynote, the message was clear: adoption of real-world tech is happening at breakneck speed. From predictive analytics reshaping customer experiences to automation streamlining operations, companies that embrace AI’s accessible applications are poised to outpace competitors.

Enhanced Customer Engagement

AI chatbots and virtual assistants are redefining customer service. OpenAI’s ChatGPT offers ability to provide 24/7 support, automate FAQs, and even upsell products during interactions. Studies reveal that businesses using AI-driven customer service see a 25% increase in customer satisfaction. 2025 is the year customer-facing agents will improve the buying experience.

Workflow Automation

Workflow automation tools such as those offered by platforms like Zapier and Monday.com use AI to eliminate repetitive tasks. These solutions free up employees for higher-value work, reduce errors, and ensure consistency across operations. Gartner estimates that 50% of managerial tasks could be automated by 2025, but most businesses have barely scratched the surface.

Predictive Analytics

Retailers and financial institutions alike are leveraging predictive analytics to anticipate customer needs and market trends. While the Fortune 1000 have access to Salesforce Einstein and IBM Watson, we expect more SMBs (small and medium-sized businesses) to access it in the years ahead.

AI Tools Gaining Steam

In recent weeks, other LLM-enabled tools have gained traction:

Perplexity is ideal for internet searches and feels more like a web browser than ChatGPT. Use Perplexity for content generation, white papers, and R&D.

NotebookLM is useful for conducting research, analyzing, and summarizing documents. It can write SOPs, employee handbooks, and work instructions.

Napkin AI creates beautiful graphics instantly and is free to use.

Video: Gartner’s Top Strategic Tech Trends for 2025

Podcast Recommendation – Dividend Cafe: The Week AI Became Questioned

The Cost of Money is Global

The January Fed meeting yielded a predictable result with no action on rates. We must remember there are central banks around the world setting rates, which in part reflect economic health on a regional basis.

As of February 2, 2025, central banks in the U.S., Canada, the Eurozone, and China have set their key interest rates as follows:

Canada

Canada’s economy has been robust, with a projected growth rate of 2.7% for the year. Inflation has cooled and the job market remains strong with an unemployment rate at 4.2%, aligning with the Bank of Canada’s long-run trend estimate.

Eurozone

The Eurozone has faced economic challenges, with zero growth reported in late 2024. Major economies like Germany and France experienced contractions of 0.2% and 0.1%, respectively. In response, the European Central Bank has reduced interest rates to 2.75% to stimulate economic activity.

China

The People’s Bank of China (PBoC) has kept its key lending rates unchanged, with the one-year loan prime rate (LPR) at 3.1%. This decision comes amid renewed pressure on the yuan and caution about potential U.S. policy shifts under the current administration. China’s GDP grew by 5.4% year-over-year in Q4 2024, driven by a series of stimulus measures introduced since September.

Video: Jerome Powell EOCM Meeting Presser

The Strategy Experts

Marc Emmer is President and Chief Strategist & Facilitator at Optimize Inc. He is an author, speaker and consultant recognized as a thought leader throughout North America as an expert in strategic planning.