Satya Nadella warns of ‘model overhang’ in 2026, says AI capabilities outpacing real-world impact

Microsoft CEO Satya Nadella has shared his outlook for AI going into the new year. In a blogpost, Nadella said that 2026 will be a ‘pivotal year’ for artificial intelligence as the technology transitions from a phase of discovery to ‘widespread diffusion’. Nadella said that the industry is now beginning to distinguish between “spectacle” and “substance” to gain a clearer sense of where the new technology is headed and how it is going to impact the world.

In a rare public admission, Nadella said that we are currently in a state of…