2026 will be a turning point for AI as focus shifts from hype to real-world use: Satya Nadella

New Delhi, Dec 30 : Microsoft CEO Satya Nadella has said that 2026 will be a crucial year for artificial intelligence, marking a shift from experimentation and excitement to wider, real-world adoption of the technology.

In a blog post, Nadella said the AI industry is moving beyond flashy demonstrations and beginning to separate “spectacle” from “substance” to better understand where AI can deliver meaningful impact.

"The pace of AI development has been extremely fast, but admitted that the ability to use these powerful systems in practical ways has not kept up," Nadella acknowledged.

He described the current situation as a phase of “model overhang”, where AI models are becoming more capable than our ability to apply them effectively in everyday life, businesses and society.

“We are still in the opening miles of a marathon,” Nadella wrote, noting that while progress has been remarkable, much about AI’s future remains uncertain.

"Many of today’s AI capabilities are yet to translate into tangible outcomes that improve productivity, decision-making or human well-being at scale," he said.

Reflecting on the early days of personal computing, Nadella referred to Steve Jobs’ famous idea of computers being “bicycles for the mind”, tools that help humans think and work better.

"This idea needs to evolve in the age of AI," he added in the blog post.

"Instead of replacing human thinking, AI systems should be designed to support and strengthen it, acting as cognitive tools that help people achieve their goals more effectively," Nadella mentioned.

According to Nadella, the real value of AI does not lie in how powerful a model is, but in how people choose to use it.

He said the debate should move away from judging AI outputs as either low-quality or highly sophisticated, and instead focus on how humans adapt to working with these new tools in everyday interactions and decision-making.

The Microsoft chief also stressed that for AI to create real impact, the industry must move beyond simply building advanced models.

He said there is a growing need to build complete systems around AI, including software, workflows and safeguards that allow the technology to be used reliably and responsibly.

While AI is advancing rapidly, he admitted that current systems still have rough edges and limitations that need careful management.