Setting the stage for 2026: Continuing AI pragmatism
Physical AI adoption, shifts in generative AI dominance and sovereign AI's rise in Europe and India are some predictions for 2026, according to Omdia's Mark Beccue.
Welcome to 2026, the year AI continues its methodical journey toward pragmatism.
There isn't an AI bubble in 2026. There is no issue with ROI for AI, regardless of how folks interpreted MIT's "State of AI in Business 2025" report about ROI. (How do you measure ROI on proofs of concept, and why would you measure ROI on POCs?)
As a reminder, AI is still in its infancy, and this is particularly true for enterprise AI. The majority of enterprises have less than three years' experience with AI, which means the structures, culture, processes and lifecycle management of AI are not fully formed, let alone mature, in most organizations.
Those who have succeeded with the application of AI -- for example, companies such as Adobe, Salesforce, ServiceNow and SAP -- are a relatively small group of AI innovators that have one thing in common: they started with AI five to 10 years ago, committed to the technology as a long-term investment. These organizations learned during that time what was needed for structure, culture, processes and lifecycle management. When generative AI and agentic AI materialized, they adapted quickly and accelerated.
All this to say that survey research from Omdia, a division of Informa TechTarget, repeatedly shows enterprises are committed to AI. In 2026, organizations will accelerate their investments and commitments, continuing the boring-sounding but critical work of operationalizing AI in their organizations.
Is this a prediction? No, it's a trend. It's been one for a few years and will remain one for a few years to come. Let's move on to some predictions.
Free ChatGPT shuts down or gets severely restricted; users shift to Gemini, Copilot
OpenAI cannot sustain free ChatGPT unless it moves to an ad-supported revenue model. This isn't likely, or it would have happened already. Google and Microsoft view their respective Gemini and Copilot apps through a different lens; they are largely complementary to adjacent revenue streams, such as search and Microsoft 365. As such, they can offer these apps for free or at discounted rates. Once OpenAI starts to lose ChatGPT users, what happens? It will lose its market clout and cease to dominate AI stock market trends.
Physical AI emerges
In 2026, a market ecosystem is coalescing to accelerate the adoption of a new area: physical AI. HCL Technologies has a definition that works for our purposes: "At its core, physical AI unites cognition and mechanics. It combines AI models, simulation and real-time perception with robotics and sensors to create systems that learn from experience, adapt to uncertainty and work seamlessly with humans. ... Traditional AI operates in the digital realm, generating predictions or automating software workflows. Physical AI, by contrast, functions in dynamic and uncertain real-world environments. Designed for resilience, it handles variability in objects, environments and human collaboration, enabling enterprises to move beyond advisory roles toward autonomous operational capability."
At CES this week, NVIDIA announced the availability of a comprehensive physical AI stack, including robot foundation models, simulation tools and edge hardware.
Physical AI is not just about robots for manufacturing and logistics; it also has applications for sectors such as energy, transportation, construction, public safety and general field service management.
Sovereign AI will ignite AI innovation in Europe, India
Sovereign AI refers to a specific nation or region's ability to maintain autonomous control over its AI ecosystem, including data governance, AI model development, infrastructure ownership and regulatory frameworks. It encompasses ensuring domestic AI capabilities, protecting jurisdictional interests and reducing dependence on foreign AI technologies and services.
The concept emphasizes national autonomy in AI capabilities, often for reasons of data sovereignty, security, resilience and economic competitiveness.
Enterprise adoption of sovereign AI in the EU, the United Kingdom and India will grow significantly in 2026. Because these markets are big enough with stand-alone addressable markets, there's a good chance that domestic AI ecosystems will gain traction and displace some U.S. and China-based vendors. That displacement is unlikely to happen with GPUs or CPUs, but rather in services and software -- AI models that go deep in languages other than English come to mind. To an extent, the smaller the market size (Denmark, Finland, Slovenia, etc.), the better the chances are for a regional vendor to thrive. When enterprises have access to better tailored models in their language, results will theoretically be more accurate, accelerating AI initiatives into production.
Separately, India represents a massive, stand-alone market opportunity, rivaling the U.S. and China markets. Sovereign AI regulations there can boost potential Indian AI ecosystem players, giving them the opportunity to innovate and thrive in India and perhaps expand to challenge AI business outside of India.
Mark Beccue is a principal analyst at Omdia, where he covers artificial intelligence.
Omdia is a division of Informa TechTarget. Its analysts have business relationships with technology vendors.
