‘We will evolve from models to systems when…’: Microsoft CEO Satya Nadella predicts major AI shift for 2026

Microsoft Chairman and CEO Satya Nadella has declared 2026 a pivotal year for artificial intelligence. On his personal blog, titled ‘sn scratchpad’, Nadella says that AI will mark a transition from the initial hype-driven discovery phase to widespread practical adoption and societal impact. In a reflective year-end post, Nadella highlighted the need to distinguish “spectacle from substance” in AI development, warning that capabilities currently outpace real-world applications in what he termed “model overhang.”