From predictive analytics to personalized learning, AI is rapidly transforming how skills are built—and who gets to build them. Yet even as the learning tech market balloons to nearly 600 vendors, according to RedThread Research, the influence of L&D in strategic discussions is fading.

With tighter budgets and increased pressure to align with growth priorities, HR leaders are being forced to take a hard look at what learning and development is really delivering—and what needs to change.

Research paints a clear picture: L&D must evolve from a support function into a core strategic partner, says RedThread co-founder Dani Johnson. In a fast-moving market fueled by AI and related emerging technologies, ensuring an organization has a skilled workforce has become the primary mandate.

Here are five takeaways from a recent webinar Johnson presented on this topic.

L&D market is ‘big, fast and loud’

The learning technology space has seen explosive growth. Johnson described it as “big, fast and loud”—full of innovation but also crowded and chaotic. Despite ongoing M&A activity, consolidation hasn’t slowed the influx of new players. Many vendors are racing to claim space in AI and skills-based development, making it hard for HR leaders to identify which technologies truly deliver impact.

Research conducted by Johnson and her RedThread colleague Heather Gilmartin found that generative AI has enabled 55 new or enhanced learning capabilities, from predictive analytics to smart learning paths—capabilities that personalize content delivery, anticipate learner needs, streamline administrative tasks and support real-time feedback and coaching. This flood of new features is transforming what learning can do, but it’s also raising the stakes for L&D teams to keep up.

Learning and development’s declining influence

Despite the tech boom, Johnson says, L&D’s voice in business strategy has weakened since 2022. She points to missed opportunities during the pandemic, which she called an opportune time for HR leaders to reposition L&D as a strategic function.

Johnson suggests, however, that many organizations were in crisis mode, focusing on immediate survival rather than long-term capability building; meanwhile, some L&D functions lacked the data and influence to demonstrate their strategic value. At many companies, learning teams weren’t embedded closely enough with business leaders to align their work with shifting priorities. As a result, rather than stepping into a more central role, L&D was often sidelined during a critical period of organizational transformation.

Now, with CEOs focused on growth, learning budgets are shrinking, and the pressure to demonstrate business value is higher than ever.

Learning and development’s role, Johnson emphasizes, is no longer about delivering training. “Your job is actually to ensure a skilled workforce. And the only really big question left is, what are you going to do about it?”

While many HR leaders may hope that managers serve as the link between employees and learning and development, research shows there is a gap.

According to LinkedIn Learning, employees are receiving significantly less support from their managers in 2025 compared to last year. In the past six months, only 15% of workers reported that their manager helped them develop a career plan—a drop of five percentage points since 2024, researchers found.

Learning must happen everywhere

Building a skilled workforce carries dual importance, as job seekers join organizations in considering learning a priority. Nearly half of candidates cited greater opportunities for career growth as the main decision driver when accepting an offer, according to a Gartner study of nearly 3,000 candidates conducted in early 2025.

Traditional, linear models of learning may no longer reflect how employees gain skills. Johnson stresses the importance of embedding learning in the flow of work. “Time away from work is really, really valuable, and so we have to figure out how to leverage that work to learn,” she says. AI can help facilitate this shift, enabling real-time support, smart recommendations and personalized development at scale.

The rise of AI may also eliminate many entry-level roles, which historically provided hands-on learning and growth opportunities. That puts even more pressure on L&D to design pathways into more complex, high-value work—fast. 

AI is an accelerator, not a replacement

AI isn’t replacing L&D—it’s enabling it. According to a 2025 report from the University of Phoenix, nearly four in 10 HR and learning leaders identify leading teams of both people and AI as a key skill that leaders need to develop.

From personalized learning journeys to predictive skill mapping, AI is expanding what’s possible. But experts say the possibilities also depend on clean, trustworthy data. Johnson emphasizes the need for strong data hygiene and governance to ensure AI-powered systems produce meaningful outcomes.

Johnson insists a data-driven roadmap requires intentional design, strategic focus and technical fluency—not just a new toolset. “What if AI actually personalizes development based on behavior and goals and workload and even emotional cues, making it highly relevant?” she says.

Breaking out of the silo

Finally, learning functions, she says, can no longer operate separately from the business: “L&D literally cannot afford to be in a separate place anymore … We have to burst out of the ivory tower that we’ve been living in for a really long time.”

To stay relevant, L&D professionals must align their efforts with these business priorities, talent strategy and organizational goals—and make sure their work reflects those shared outcomes.

This shift will require new skills within the L&D team. Traditional instructional design alone won’t cut it, Johnson says. According to the report from the University of Phoenix, 45% of learning leaders surveyed say that gen AI is included in their CEO’s strategic agenda. Professionals need fluency in AI, tech platforms, business acumen and data analytics.

“We need to dip into all of these other areas,” Johnson says, “and make sure that we’re business people first and learning people second, because that’s why we’re there.”