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AI will no doubt continue to grow in 2026, but the industry is starting to sober up

IN OUR END-OF-YEAR review in this newsletter, we argued that 2025 was the year where AI technology went from curiosity to ubiquitous presence within today’s offices and workplaces. If you weren’t using an LLM platform or dealing with an enterprise AI tool at the start of 2025, there was certainly a good chance you were doing so by the end of it.

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But it wasn’t like we were describing an unstoppable, runaway train dynamic — just a few weeks before, we also wrote about a report from The Economist that suggested adoption rates for AI tech had started to fall. Was it fatigue? Perhaps employee backlash to a technology repeatedly linked with job loss? Had companies started to respond to poor returns on AI investment? Had users come to view the tech’s limitations as a problem?

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We’re heading into 2026 with a lot of questions lingering over the AI sector, which has been forced to start responding to concerns of a bubble. If AI is going to become the ubiquitous technology its advocates claim it can be, adoption statistics are going to be important to watch, because they serve as a good proxy for how useful AI will be in generating actual returns.

“The disparity between investment in AI and its actual usage underscores a significant challenge faced by many organizations: the translation of AI capabilities into tangible, everyday business use,” wrote Christoph Müller of Gravity Global. Microsoft, for instance, cut sales target for its AI software, admitting that “almost nobody is using CoPilot,” as tech reporter Jon Martindale put it. “For enterprise leaders who’ve been caught up in the AI transformation narrative, this shift demands serious attention,” Müller said.

One reason to bet on AI growth might be the sheer amount of money companies have invested and their unwillingness to let that go. Many AI projects spent 2025 stuck in pilot purgatory: according to software company Easy Redmine, while three-quarters of organizations use AI in some fashion, only around one per cent of companies say their AI implementation is “mature,” and we may see that number grow over the year.

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But there are reasons we could see a retreat, too. The hallucination problem persists, the tech hasn’t won over many skeptics and revenue challenges for tentpole companies like OpenAI are stark.

So, expect 2026 to be a year where ROI is the dominant conversation around AI, which we think will be focused on practicality and actual use more generally. This is probably a good thing — hype, sales pitches and boosterism have spread the word, but it’s also led to a lot of poor AI use (looking at you workslop). “The era of easy gains from AI hype is over,” wrote MarketMinute, “but the era of sustained growth form AI utility has only just begun.” Kieran Delamont