AI’s Impact On Localization Technology In 2025
It’s that time of the year again when industry experts dust off their crystal balls and peer into the future of localization technology. By no means is this an easy feat. This time last year, we were talking about how the fear of AI had died down, and how hyper-personalization, agile models, and data-driven decisions were going to dominate localization programs around the world.
Twelve months on, we caught up with our Product Director Sara Basile to get her take on the topics that will dominate the conversations around the language-technology watercoolers. Not just that, we also asked Sara how these predictions will affect businesses, and what organizations can expect from their localization-technology provider to benefit from them.
Key takeaways:
Why market pressures have transformed AI from a competitive advantage to a basic requirement
How companies will establish clear protocols for AI data handling across global operations
How AI systems will adjust to local market expectations and what will they look like
Sara, 2025 seems like AI will be the centre of the conversation again. But this time from a different angle. What do you think is going to be the biggest trend around AI this year?
To put it simply, I believe AI-driven localization is going to become the standard. The localization industry has evolved from AI’s initial hype cycle through a period of careful skepticism and measured adoption. Now, in 2025, AI and localization are set to become inseparable. The AI market, which was valued at $196.63 billion in 2023, is projected to grow at a staggering CAGR of 36.6% through 2030. This means that companies cannot afford to ignore AI any longer if they don’t want to fall behind their competitors.
How should they perceive AI as part of their business, then?
AI will evolve from a luxury to a cornerstone of localization, with mature machine learning algorithms and deep learning models enabling near-human-quality, context-aware translations in real time. This technological leap gives businesses the advantage of scaling at an unprecedented pace without compromising the quality of their output or skyrocketing resources. This is a transformation we’ll see across the whole SaaS landscape, standardizing what we predicted last year about the rise of hyper-personalization and data analysis across all global businesses.
That’s a big leap from last year because we know that some industries were reluctant to implement AI due to compliance factors.
AI’s high level of cost-efficiency has convinced even the most hesitant of sectors, including heavily regulated industries like life science and manufacturing – that they no longer see AI as a risk but as a necessity. Their focus extends beyond just translation to creating seamless integrations within client ecosystems, ensuring AI-driven solutions function as part of a comprehensive, user-friendly process.
Smart businesses are asking the right questions: How do we protect sensitive data? How do we maintain cultural authenticity? How do we build AI systems that don’t just translate words, but understand context and compliance? And that’s what leading localization-technology providers will deliver.
Moving on to other AI-related topics you think will be the talk of 2025. There has been a lot of talk about the ethical use of AI, which we can tie into what you said about the more “skeptical” industries now being comfortable with AI. What will we see in this regard this year?
There is no doubt that we will see a huge emphasis being placed on the concept of “ethical AI”, as well as its security and sustainability. Ethical implications of AI implementation have been well covered in the past couple of years, but in 2025 we will see those concerns being actively addressed. The answer is quite simple: companies need to ensure that their AI-driven localization efforts respect data privacy laws and promote responsible use.
Global organizations face significant risks when inputting sensitive data into AI systems for localization purposes. It is so easy for an employee to unknowingly input sensitive data into AI, such as confidential business information, customer data, or proprietary content. This data, processed through AI platforms, could be exposed to unauthorized access or unintended usage.
Take the Lead in AI-Driven Localization!
And is this where the role of localization-technology providers will come in?
Exactly. In 2025, I expect to see leading localization providers stand out from the rest through features like ethical AI certifications that verify responsible AI usage through metrics for algorithmic bias, cultural sensitivity, and data transparency. Companies will need to implement adaptive governance frameworks that automatically classify content sensitivity and enforce corresponding AI processing rules while maintaining audit trails that analyze patterns to proactively identify security and ethical risks.
We’ll also see a lot of emphasis placed on data protection when it comes to choosing an AI provider, and the localization industry will be no different. Users will expect transparency and security, fostering trust in global brands; and clients will need to factor compliance and ethical standards into their localization strategies to maintain their reputation.
The next frontier isn’t just about AI that speaks multiple languages – it’s about AI that thinks in them. Agentic AI will transform global business by delivering hyper-personalized experiences that respect local nuances and cultural contexts while driving efficiency and customer loyalty across borders.
Any other trends that we need to keep an eye out for? What can we say from an innovation perspective?
There has been a lot of talk about agentic AI. Its breakout seems likely. Agentic AI is the next-generation leap from generative AI, the logical step that derives from GenAI usage. It represents smart virtual assistants capable of autonomously managing complex tasks such as problem resolution, proactive customer service, or product discovery among many others.
How will companies use agentic AI and what role will localization play?
Companies will benefit from agentic AI because it will deliver targeted solutions that solve high-value business problems. With agentic AI, the adaptation and localization of content for different audiences is going to be a proactive effort rather than a reactive one from a technological standpoint. This means the localization process will happen during the actual creation of the content, not after, a term we could coin as “agentic localization”. This means improved efficiency in deploying these tools in many languages and, especially, higher customer satisfaction across all your markets
In which industries should we expect to see it deployed first? And what is the benefit for customers?
Unlike generalized AI systems, agentic AI can localize and contextualize its actions, making it indispensable for industries like e-commerce, healthcare, and logistics. Consumers should prepare to see a large number of major businesses deploying AI agents tailored to their needs in 2025. For customers, the benefit is simple: a hyper-personalized experience that feels truly tailored to them; for businesses, the ROI speaks for itself: streamlined operations and increased productivity that translate directly into stronger customer loyalty and brand presence.
To conclude, as we reflect on the GenAI journey in localization, how well are we doing in anticipating its impact?
Since the breakout of GenAI a few years ago, we’ve spent this time learning how to deploy it effectively and unlock its full potential from a business perspective. Last year, our predictions about overcoming AI fears, embracing hyper-personalization, and driving agility proved accurate. I’m excited to revisit these topics in 12 months to see if we are once again on the right track. Making informed predictions can seem like just a fun game but in an industry like ours, it’s a crucial exercise so we can anticipate changes for our clients and help them stay ahead of their competitors.
About the Author – Sarah Bastile, Product Director
Sara Basile is Product Director at XTM International. After 10 years of experience in the localization industry at global enterprises, Sara joined XTM in 2020. In her role, Sara leads the product operations and owns the strategic product vision, ensuring XTM keeps delivering customer value through a successful roadmap. Sara is an advocate for innovation and smart technology and has built a customer-centric approach to product management at XTM.
