A new year is here, and the AI landscape is shifting faster than ever. With the festive period behind us, many are back at their desks with renewed focus and energy for what’s next – but what is next? We made enormous strides with AI in 2025, but how will approaches differ in 2026, and what can we expect to impact our work and daily lives?
We sat down with our Chief Technology Officer Matt Cloke to discuss what he believes will define AI in 2026 – from always-on assistants to the rise of sovereign models and market consolidation.
What will be the biggest change in day-to-day AI usage in 2026?
Next year, we’ll see significant developments in model and agent capacity, leading to agents with permanent memories that never sleep. This will provide teams with an always-on form of support that works around the clock and retains information between sessions.
These tireless assistants could manage inboxes overnight, suggest replies and even handle recurring tasks such as scheduling meetings autonomously. While this might sound as simple as leaving AI running, it really requires a fundamental rethink of how models are built and work to ensure the avoidance of any hallucinations or compute constraints.
How will geopolitics influence AI next year?
Sovereign AI will be a defining theme next year, driven by growing geopolitical uncertainty and the distrust of Silicon Valley.
Governments and enterprises will push for localised data centres to ensure models and data processing remain within national borders, along with regulatory clarity over where data lives and which country’s laws apply. We’re already seeing this with OpenAI’s new UK data-residency and Middle Eastern nations mandating in-country data and compute capabilities.
Forks will emerge in AI models. We’ll see country-specific models, such as a UK sovereign model or a UAE model, which will lead to further fragmentation, as each region develops differing standards and governance models. As such, it will be interesting to see how innovation and collaboration intersect in a new, sovereignty-first environment.
What about the evolution of AI applications? Are we still chasing the ‘killer app’?
Next year, the emphasis will shift from killer applications toward more integrated methodologies. At Endava, we’re focusing on this with Dava.Flow, which is an AI-enabled engagement methodology that has typically reduced time-to-market by up to 40 per cent. This shift away from generic silver bullet approaches will naturally drive greater specialisation.
Will we see an AI bubble burst in 2026?
Everyone’s been talking about the AI bubble bursting of late, and how 2026 will be the year of winners and losers, but I see it as one of market consolidation.
Big players like OpenAI, Google, Microsoft and NVIDIA will remain dominant, and many startups risk disappearing as their niche functions become absorbed into platform features.
An example of this could be AI transcription services being made redundant as known and trusted platforms start to offer native meeting transcriptions. If we want to keep innovation alive and thriving, the UK government needs to put provisions in place to support the startup ecosystem and create a healthy environment in which new ideas and companies can form even as the market consolidates.
Whether this is in the form of tax breaks or other initiatives, there will need to be some kind of heat source to keep AI innovation going after its flash in the pan moment.
Final thoughts
As 2026 begins, it’s clear that AI is entering a new phase – one defined not by novelty, but by depth, permanence and strategic impact. Always-on assistants, sovereign models, embedded methodologies and market consolidation all point to an ecosystem that is maturing rapidly.
For organisations, the challenge now is to move beyond experimentation and build the foundations that will let them thrive in this new environment: resilient data strategies, thoughtful governance and a willingness to rethink how work gets done.
Matt’s predictions highlight a future where AI becomes both more powerful and more contextual – deeply integrated into operations, shaped by geopolitical realities and driven by a handful of dominant platforms. The organisations that succeed will be those that continue to embrace the shift, prepare for increased fragmentation and stay committed to innovation even as the market tightens.