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It’s a new year, and big changes are on the horizon.
In two weeks, Donald Trump will be sworn in as the 47th president, and a host of new policies that could deeply impact business are on the table. For years, Trump and his allies have talked about tax cuts for corporations and the wealthy, new tariffs on a variety of nations, deportation of immigrants, and cutting government bureaucracy and regulatory reforms. While many of those things are likely to happen in some form, it’s unclear what will actually take place and when. But business leaders have spent the last several months (at least) preparing for the worst and hoping for the best.
Outside the political realm, the final days of 2024 and the first days of 2025 have seen some major changes. The proposed $15 billion sale of U.S. Steel to Japan’s Nippon Steel was stopped by President Joe Biden last Friday, keeping the company in U.S. hands, but, according to U.S. Steel, leaving its future in question. The decision, the company says “has sacrificed the future of American steelworkers for [Biden’s] own political agenda.” (Trump has said he also opposes the sale.) The deal, which Biden rejected for national security reasons, may damage future investments and business plans with foreign allies, analysts have said. U.S. Steel and Nippon Steel jointly filed two lawsuits on Monday morning over the rejected deal, asking the court to set aside Biden’s blocking order and the federal government’s review process, and accusing the U.S. Steel union president and competing steelmaker Cleveland Cliffs of “anticompetitive and racketeering activities” to prevent any party other than Cleveland Cliffs from buying U.S. Steel.
Large retailers are also seeing big transitions. Closeout retailer Big Lots announced it was going out of business after a planned acquisition failed, but days later Gordon Brothers Retail Partners, which was handling its sale, kept the chain alive by acquiring all of its assets and quickly reselling some of them. And the Nordstrom family succeeded in buying a controlling stake in the $6.25 billion retailer, which will go private following 53 years as a public company.
What else is in store for business this year? Surely there will be more deals and losses, stock market ups and downs, successes and bankruptcies. We’ll be watching it together, and Forbes CEO will continue to bring you all the news and trends decision-makers like you need to know.
Generative AI has brought sweeping changes to businesses in many industries, using technology to change how work is done. As the technology continues to develop and improve and companies work toward implementing it, generative AI promises to continue to reinvent business. I talked to Scott Belsky, Adobe’s chief strategy officer and executive vice president of design & emerging products, about what AI technology will likely do in 2025. An excerpt from our conversation is later in this newsletter.
ECONOMIC INDICATORS
While 2024 was a banner year for the stock market, 2025 is off to a much slower start. Last year, the S&P 500 increased 23.3%, while the Nasdaq composite was up 28.6% and the Dow Jones was up 12.9%. With only two full trading days in 2025, it’s hard to pinpoint any trends, but each of the three indexes traded down last Thursday. Tesla saw the most significant drop—6.1%—after reporting fewer vehicle deliveries in 2024 than expected by analysts. Apple also saw its stock drop 2.6% after discounting iPhones in China. The three major indexes finished the week just barely making up for Thursday’s losses, though Tesla shares rebounded with record-high 2024 sales in China. Other automobile companies rallied Friday, with EV maker Rivian posting its best one-day percentage gain ever, and Ford and General Motors each reporting their highest annual car sales since 2019.
The economic picture for the year is an unknown. While the Federal Reserve cut interest rates a quarter of a percent last month, the Fed said in a statement that rate cuts may not continue at the previously expected pace this year due to an “uncertain” economic outlook. Forbes senior contributor Bill Conerly projects the economy will continue to grow this year, but at a slower pace than 2024. Inflation, he writes, could also stick around at rates higher than the Federal Reserve’s 2% target due to Trump’s proposed immigration crackdown, which is likely to limit production capability at U.S. enterprises.
RETAIL + COMMERCE
Dick’s Sporting Goods is a business success story with more than 860 locations across the U.S. and a market capitalization of more than $18 billion. Executive Chairman Ed Stack, the son of the store’s founder and its leader for four decades, is the largest individual shareholder with a net worth of about $5.6 billion. Forbes’ Jemima McEvoy talked to Stack about his most recent reimagining of the store: Transforming several of its locations into supersized Dick’s Sporting Goods Houses of Sport. These are about three times the size of a standard 50,000-foot store, featuring a dizzying array of shoes and equipment for sale, a team of specialty technicians to repair items including tennis rackets and baseball gloves, and facilities like indoor climbing walls, batting cages, golf bays and outdoor sports fields.
This brick-and-mortar expansion, which is happening at a time when many retail stores across the country are closing their doors, is paying off for Dick’s, which expects to hit a record $13.3 billion of revenue this year—up more than 50% from pre-pandemic 2019. But, McEvoy writes, Stack has a long record of taking big chances and doing things differently at Dick’s Sporting Goods. As a young man, Stack got his father’s blessing to expand his small bait and tackle business—both in terms of inventory and store locations. He pulled the store from the brink of early financial catastrophe. He also turned heads when he stopped selling guns, destroying the chain’s semi-automatic rifle inventory following the 2018 school shooting at Marjory Stoneman Douglas High School in Parkland, Florida. The move ended up increasing Dick’s revenues by replacing the store’s floor space with merchandise in growing categories.
Stack shared eight tips for success with McEvoy. Number one: Always keep score and follow both your business and others. And also, don’t be afraid to fail.
NOTABLE NEWS
Costco Wholesale is the latest big company targeted for its diversity, equity and inclusion program. But unlike many others, which have stepped back from policies supporting DEI, Costco is doubling down, writes Forbes senior contributor Pamela Danziger. The National Center for Public Policy Research, a conservative think tank that opposes DEI, is waging a proxy fight at Costco’s upcoming annual meeting later this month, seeking to force the retailer to conduct research and publish a report on the risks to the company maintaining its current DEI policy. Costco recommends shareholders vote against this measure, saying, “Our success at Costco Wholesale has been built on service to our critical stakeholders: employees, members and suppliers. Our efforts around diversity, equity and inclusion follow our code of ethics.”
The Costco board has said a study—which is not a guarantee of policy change—isn’t the best use of its resources, and accuses the NCPPR of having a broader agenda to abolish its diversity initiatives instead of reducing shareholder risk. Forbes contributor Corinne Post looks at why Costco finds its diversity policies important and worth keeping intact.
While the headlines are filled with stories of companies scaling back or renouncing DEI efforts, more may be following Costco’s playbook. A November LinkedIn poll showed that 47% of companies said they will be doing more DEI efforts in their workplace moving forward, with a third keeping them the same, writes Forbes senior contributor Janice Gassam Asare. Only 3% said they are cutting back.
TOMORROW’S TRENDS
Adobe’s Strategy Lead On How AI Is Reimagining Every Aspect Of Business
Throughout his career, Scott Belsky has been an entrepreneur, creator, author, investor and business advisor. He’s currently the chief strategy officer and executive vice president of design & emerging products at Adobe. I talked with him late last year about how AI has changed strategies for businesses and creators, as well as what is to come in the technology in 2025.
This conversation has been edited for length, clarity and continuity. A longer version is available here.
From where you sit and what you see, both at Adobe and in the wider space, what do you see coming online and becoming available and accessible to businesses in the way of AI in 2025?
In 2025, there will be a few themes. Number one is that the memory that AI tools have of our preferences will start to enhance the outcomes that we can achieve. On the content and marketing side, the AI remembering the character consistency of something you’re trying to generate content around—whether it be a product you’re shooting marketing images of, or a character going through a commercial or a short piece of video that you’re developing. The remembering of your brand components, your preferences for brand tone and copy and all that sort of stuff.
On the personal consumer LLM stuff that we all use, the context windows are getting longer and more sophisticated. These AI agents remembering everything we’ve ever purchased, everything we’ve ever liked or disliked, those preferences will start to kick in to uplevel the quality of those experiences.
The rise of [AI] agents is going to surprise all of us. We’ve always had a learning curve for learning tools, software and processes. That’s the learning curve of starting a job or rising the ranks. I would imagine some time this year, these agents are going to start to meet us where we are in the software tools that we use. They’re going to know what we know and don’t know about it, and they’ll allow us to leverage a lot of power with natural language.
I think it’s really exciting to know that anyone could use a lot of tools that were out of reach. It [also] allows companies like us to not just target marketers and creative pros, but also the stakeholders of marketing and creative, which is almost everyone in an organization. And it also drives better usage of the product. If an agent helps you and takes actions on your behalf and can explain and show you, it’s a holy grail for helping people get value out of the products they use.
If we were having a conversation a year from today, looking back on what happened in 2025 and what to expect for AI for 2026, what would we be talking about?
We’d be talking about the new discoveries we’ve had on how to use these reasoning engines. We’re still at the infancy of how we leverage these state-of-the-art LLMs. As they gain more powerful and longer context windows, and they start to learn who we are, and in some ways empathize with us and where we are in our knowledge, what our interests are, et cetera, these reasoning engines are going to play a really interesting role, kind of augmenting the way our brain works.
The thing that I find most interesting these days, personally, is when I talk to friends about how they’re using these tools: To go back and forth and make health decisions about themselves that they never had the resources to make. Or they’re putting a proposal together for a customer, and putting it into the LLM first and saying, what might give my customer pause? Why might my customer not want to do business with me based on this proposal? They’re getting such incredible, interesting responses increasingly based on who they are or what their company does. It’s magical. It’s like having an instant focus group of exactly who you’d want to be in front of you at every given moment in time, and having those insights come back to you. We’re going to be surprised by the power of these reasoning engines for making decisions, for managing personal things, and for being more effective in our jobs.
I also think they’re going to start to play a role in the commerce or purchase decisions that we make. The idea that we used to decide what restaurant to go to or what thing to buy based on how many stars it has from strangers is going to be replaced by the wisdom and guidance of an AI that knows us extremely well and can give us a recommendation based on our preferences, opposed to based on what the average person thinks.
If you could give some wisdom to CEOs that are looking forward and trying to map out an AI strategy for 2025, what would you say?
First, allow your teams to play and pilot this technology. Novelty precedes utility when it comes to adoption of new technology. You might not feel like it’s driving the bottom line immediately, but that play helps them discover the utility that ultimately makes a huge impact in the business.
Number two is constantly asking yourself a question. Whenever you’re reviewing the roadmap for a particular function of your organization, or the hiring plan, or the product strategy, you should always be asking yourself: Are we sufficiently refactoring how this works? And are we sufficiently re-imagining what’s possible? We’re in a platform shift now that happens probably once every decade—if not longer—where you actually can fundamentally change the way something operates. Over the coming years, roles will change. The tools that we use to run certain functions will change. And as a leader of an organization, you have to be asking yourself: Are we sufficiently refactoring? Are we sufficiently reimagining how we can achieve our mission?
FACTS + COMMENTS
A study last year from the Economic Policy Institute found that CEO pay since 1978 has grown at a rate that far outpaces increases in regular worker salaries when adjusted for inflation.
1,085%: Average increase of CEO pay at a major U.S. company between 1978 and 2023. Typical worker salaries only increased 24% in that time frame
290x: Salary difference between a CEO and average employee in 2023. In 1965, CEOs made a salary 21 times greater than employees
‘Because of their leverage over corporate boards, not because of their skills or contributions’: Why the report says CEOs are getting paid so much more now
STRATEGIES + ADVICE
Reflecting on business decisions, events and the landscape ahead of and behind you can create a clearer picture of what to do next. Here are some questions to ask yourself to make 2025 the best year for your business.
Is building a stronger personal brand your new year’s resolution? Here are some tips from top global experts to improve yours.
VIDEO
QUIZ
Stock prices for several major alcoholic beverage companies dropped last week. Why?
A. Dry January, when people give up drinking for a month, is seeing record participation and impacting sales
B. The surgeon general said these beverages should have a warning label for cancer risks
C. A new report said proposed tariffs on aluminum imports could increase consumer prices for canned beverages by 20%
D. Long-range weather forecasts predict poor growing seasons for hops and barley
See if you got the answer right here.