In 2026, AI is expected to transition from the era of hype and massive language models to a more pragmatic and practical phase. The focus will shift towards deploying smaller, fine-tuned models that are cost-effective and tailored for specific applications, enhancing efficiency and integration into human workflows. World models, which allow AI systems to understand and interact with 3D environments, are anticipated to make significant strides, particularly in gaming, while agentic AI tools like Anthropic's Model Context Protocol will facilitate better integration into real-world systems. This evolution will likely emphasize augmentation over automation, creating new roles in AI governance and deployment, and paving the way for physical AI applications in devices like wearables and robotics. This matters because it signals a shift towards more sustainable and impactful AI technologies that are better integrated into everyday life and industry.
