By Irmak Akcan, Yasin Yorganci and Emir Yildirim
Artificial intelligence (AI) technologies became the hot topic of 2025 with a wide range of impacts on the global economy, ranging from increased efficiency to new revenue sources, while resulting in a multidimensional shift, deepening competition between nations and spurring debates over employment and the environment.
The increased use of AI by corporations in manufacturing, logistics, finance, healthcare and service sectors led to reduced operational costs while reportedly increasing efficiency.
Automation and AI-powered decision-making systems reportedly saved companies billions of dollars in added value while creating a completely new global market of AI-based products, software and consulting services.
The rise of AI gave way to new employment opportunities in AI engineering, data science, cybersecurity and algorithm auditing. However, traditional job groups saw layoffs at the same time. Particularly in the automation of routine and repetitive tasks, humans were replaced by AI, which transformed the labor market.
Many countries -- most notably the US, China and EU member states -- prioritized AI investments amid a sort of tech supremacy race this year. This race reached a level that could impact geopolitical balances.
State-backed incentives, public–private partnerships and national AI strategies came to the fore in this AI war.
The rapid widespread adoption of AI led to rising investments in AI infrastructure. The number of data centers worldwide increased and created a new economic activity in the construction, energy and technology sectors. High energy and water consumption of these data centers spurred debates over the environmental impact of AI.
The societal, economic and political effects of AI riddled 2025 -- a year shaped by economic growth, a transformation in employment, accelerating global competition and environmental costs.
- Contributions of AI in global economy
The global adoption of AI may grow the global economy by an additional 15% by 2035, according to a report by consulting and auditing firm PwC on April 29.
This would mean an additional average annual contribution of 1 percentage point to global economic growth. The impact of this caliber is comparable in scale to industrialization in the 19th century.
AI-driven restructuring of the global economy has already begun, the report suggested. The pressure on companies to reinvent themselves reached its highest point in 25 years, affecting 17 of 22 global sectors, according to PwC.
AI is expected to create new economic areas, transcending traditional sector boundaries in the next decade.
The report said new sector clusters like the mobility sector, which involve electric vehicles (EVs), batteries and software, will be instrumental in the redistribution of economic value.
Despite AI’s rapid growth, climate-related physical risks will keep the pressure on the global economy, PwC said.
The global economy could fall around 7% below its potential in 2035 due to climate risks, the report showed.
AI’s energy consumption will only increase through the many data centers around the world, but limited AI applications could give way to some energy efficiency, offsetting the outcome, according to PwC.
- Some 92 million jobs to be no more by 2030
As AI contributes to economic growth, it also takes away, resulting in layoffs across professions.
A report published by the World Economic Forum (WEF) titled Future of Jobs 2025 showed that around 92 million jobs will disappear around the world by 2030 due to AI-powered automation and other AI-related tech.
New employment opportunities in data analysis, artificial intelligence development and digital technologies are expected to emerge, but routine and repetitive jobs are at high risk.
Administrative support, customer service, accounting and some office services are under the threat of replacement by AI.
The International Labor Organization (ILO) reported a very similar picture. AI and automation will lead to more risks of job loss, especially in occupations in secretarial and administrative assistance.
Reskilling, occupational transformation and education policies will be key in mitigating the impact of AI on employment, the ILO said.
The organization warned that the economic gains derived from AI-powered efficiency could deepen the inequalities in the labor market.
- Governmental measures against AI risks
As more and more companies and organizations involve AI into every corner of our lives, many governments around the world took it upon themselves to bring about various measures against AI risks.
The EU’s Artificial Intelligence Act entered into force on Aug. 1, 2024, but prohibitions on certain practices, including facial and emotion recognition in workplaces and educational institutions, became applicable on Feb. 2, 2025 in order to prohibit facial and emotion recognition using AI without consent.
In the US, the Tools to Address Known Exploitation by Immobilizing Technological Deepfakes on Websites and Networks Act — also known as the TAKE IT DOWN Act — was signed into law on May 19 to combat non-consensual “deepfake” images and videos, especially those of intimate matter like revenge porn.
The reliability and the misuse of AI was also a hot topic this year.
Incidents like the banning of the Chinese chatbot DeepSeek in some countries due to allegations of data collection as well as reports that ChatGPT conversations started appearing in search engine queries shook the confidence in AI tools.
- Data centers
Data centers are buildings that run cloud services and AI applications and store data.
These buildings consume massive amounts of energy and resources, endangering both nature and human settlements in their vicinity.
The US boasts over 4,000 data centers, according to the Pew Research Center.
These data centers’ electricity consumption made up more than 4% of the country’s total consumption last year, while electricity demand is expected to go up by 133% over the next six years.
A typical AI-focused hyperscale data center consumes electricity equal to that of 100,000 households per year.
Data centers that will be built in the future are expected to consume 20 times more electricity.
In addition to electricity, data centers require massive amounts of water to cool down the systems.
Google’s 2024 Environmental Report showed that the firm’s data centers consumed 22.7 billion liters (5.9 billion gallons) of water last year.
Google is expected to consume even more than this figure with increasing AI projects and activities.
- AI impact on human life
The high electricity and water consumption of data centers affects life around these facilities.
Communities near data centers in the US, especially in states like Texas, Virginia and Minnesota, suffer from declining water quality and even contamination. They are also faced with rising electricity and water bills as well as noise pollution.
The use of chatbots, on the other hand, can negatively impact human mental health if used in place of professional psychologists, counselors, or regular friends.
Chatbots are biased against certain mental disorders and sometimes they may guide users towards behaviors harmful to the person and/or others, according to a study by the Stanford Institute for Human-Centered AI (HAI).