The artificial intelligence industry enters 2026 with experts predicting a decisive shift from building ever-larger language models toward making AI usable through smaller models, new architectures, and systems that integrate cleanly into human workflows. The focus is evolving from brute-force scaling to researching new approaches and from flashy demos to targeted deployments.
Industry insiders expect world models to emerge as the next major breakthrough in 2026. Unlike large language models that predict the next word, world models learn how things move and interact in three-dimensional spaces, enabling AI systems to make predictions and take actions based on physical understanding.
Signs that 2026 will be a big year for world models are multiplying. Yann LeCun left Meta to start his own world model lab and is reportedly seeking a 5 billion dollar valuation. Google's DeepMind has been developing Genie and in August launched its latest model that builds real-time interactive general-purpose world models.
Fei-Fei Li's World Labs launched its first commercial world model Marble while newcomers like General Intuition scored a 134 million dollar seed round in October to teach agents spatial reasoning. Video generation startup Runway released its first world model in December, demonstrating commercial viability.
Anthropic's Model Context Protocol emerged as critical infrastructure for 2026. Described as USB-C for AI, MCP lets AI agents communicate with external tools like databases, search engines, and APIs. OpenAI and Microsoft have publicly embraced MCP while Anthropic donated it to the Linux Foundation's new Agentic AI Foundation.
Google began standing up its own managed MCP servers to connect AI agents to its products and services. With MCP reducing friction of connecting agents to real systems, 2026 is likely the year agentic workflows finally move from demos into day-to-day practice according to Sapphire Ventures partner Rajeev Dham.
Context windows are expected to stay fairly constant in 2026 after rapid expansion through 2024. When ChatGPT launched in November 2022, it could only process 8,192 tokens at once. OpenAI offered 128,000 token windows with GPT-4 Turbo in November 2023 while Anthropic released Claude 2.1 with 200,000 token windows the same month.
Google started offering one million tokens of context with Gemini 1.5 Pro in February 2024, later expanding to two million tokens. Since then, progress has slowed with context windows brushing up against limitations in the transformer architecture that make further expansion difficult without fundamental redesigns.
Anthropic and OpenAI are expected to generate 30 billion dollars and 13 billion dollars respectively in 2026 revenue according to leaked internal documents and public projections. Both companies will likely hit these targets as AI model capabilities have improved significantly over the past year with substantial room for businesses to automate operations.
The autonomous vehicle sector faces a critical test in 2026. Pony.ai is aiming for 3,000 vehicles by year end while Waymo will need 4,000 to 6,000 vehicles to meet its goal of one million weekly rides. If Waymo's supply chain ramps slower than expected and Chinese players continue production increases, at least one Chinese company could surpass Waymo in total global robotaxi fleet size.
Experts predict at least one automaker will offer a consumer vehicle capable of fully driverless operations in limited areas by year end. Tensor formerly AutoX represents a leading candidate to deliver such a vehicle to market.
The overall theme for 2026 is AI maturing from experimental technology to practical business tool, with success measured by deployment scale and revenue generation rather than benchmark performance or parameter counts.
