The artificial intelligence (AI) industry is expected to reach the key milestone of a 10% adoption rate by the end of 2025, UBS analysts wrote in a research note published on Monday.
They cited a recent quarterly report from the US Census Bureau's Business Trends and Outlook Survey, which showed a steady growth trend with AI adoption in the US improving from 9.2% in the second quarter to 9.7% in the third quarter of 2025.
The survey tracked AI adoption across more than a million companies in the US.
“We conclude that there is a high likelihood that the AI industry will soon enter an exponential adoption phase which should disproportionately benefit companies exposed to the intelligence and application layers," the analysts stated.
They continue to maintain a balanced positioning across semiconductors, software, and internet industries with a bias towards AI laggards.
The analysts at UBS compared AI adoption rates in the US with other technologies, such as e-commerce and smartphones, estimating that generative AI should take only three years to reach the first 10% adoption rate in the US, versus five years for smartphones and 24 years for e-commerce.
They believe the AI industry is more likely to follow the smartphone adoption trend than e-commerce, estimating that innovation around AI models and cost reductions will play a big role in driving the next wave of adoption.