This 2025 DORA report explores the impact of AI on software development, focusing on how organizations can maximize its benefits. It highlights that successful AI adoption requires more than just tools; a strategic approach encompassing organizational systems, clear workflows, and team alignment is crucial. Value stream management (VSM) and platform engineering emerge as key factors in amplifying AI's positive effects. The report introduces the DORA AI Capabilities Model, identifying foundational practices like a clear AI policy and a user-centric focus. The findings suggest that while AI can boost productivity and code quality, systemic changes are necessary to address issues like instability and burnout. Ultimately, the report advocates for a transformation in how organizations design their systems to fully leverage AI's potential.