Small language models (SLMs) are expected to gain popularity in 2025, providing cost-effective, efficient alternatives to large language models (LLMs) for specific tasks. SLMs are easier to deploy, especially in sensitive environments, and can outperform larger models in specialized applications. While they won't replace LLMs, a hybrid approach combining both types is anticipated. Analysts suggest businesses must adopt a strategic approach to generative AI, emphasizing the importance of use case and data quality.