Forrester Research, a market research firm, predicts that 2026 will mark the beginning of “the age of frumpy but functional AI,” signaling a shift from AI hype to practical implementation. The firm expects businesses to focus more on governance and measured adoption rather than rushing to deploy new AI tools, as companies realize many AI initiatives fail to deliver expected returns on investment.
The big picture: AI is transitioning from a revolutionary technology grabbing headlines to a mundane but essential part of business operations, similar to how the iPhone evolved from groundbreaking innovation to everyday necessity.
Key spending trends: Forrester forecasts significant changes in how businesses approach AI investments throughout 2026.
- One-quarter of businesses will delay their AI spending as they discover the technology often doesn’t deliver hoped-for returns on investment.
- A recent MIT study found that 95% of enterprise AI applications have failed to deliver tangible returns.
- “The disconnect between the inflated promises of AI vendors and the value created for enterprises will force a market correction,” Forrester writes.
Governance takes center stage: Companies are shifting their focus from aggressive AI adoption to responsible management of existing tools.
- Sixty percent of Fortune 500 businesses will appoint a head of AI governance next year, following companies like Sony and Bank of America.
- Forrester calls governance “the frumpiest word in the lexicon of business,” yet it’s becoming a growing priority for business leaders.
- Thirty percent of large businesses will require workers to complete training programs for internal AI tools.
Workforce implications: The AI market correction is reshaping hiring patterns and job roles across data-focused positions.
- Plans to hire new data engineers, scientists, and analysts are slowing as AI agents automate many aspects of these roles.
- This shift is “giving rise to a new world of agentic data and analytics,” according to Forrester.
- Vendor fragmentation is leading more businesses to build “agentlakes”—networks of integrated and interoperable AI agents—rather than relying heavily on third-party service providers.
In plain English: Agentlakes are essentially collections of AI tools that work together seamlessly within a company, rather than businesses depending on multiple separate AI services from different outside vendors.
Why this matters: The predicted market correction represents a natural maturation process where AI moves from speculative investment to proven business value, potentially weeding out unsustainable AI startups while strengthening companies with practical applications.
Recent Stories
DOE fusion roadmap targets 2030s commercial deployment as AI drives $9B investment
The Department of Energy has released a new roadmap targeting commercial-scale fusion power deployment by the mid-2030s, though the plan lacks specific funding commitments and relies on scientific breakthroughs that have eluded researchers for decades. The strategy emphasizes public-private partnerships and positions AI as both a research tool and motivation for developing fusion energy to meet data centers' growing electricity demands. The big picture: The DOE's roadmap aims to "deliver the public infrastructure that supports the fusion private sector scale up in the 2030s," but acknowledges it cannot commit to specific funding levels and remains subject to Congressional appropriations. Why...
Oct 17, 2025Tying it all together: Credo’s purple cables power the $4B AI data center boom
Credo, a Silicon Valley semiconductor company specializing in data center cables and chips, has seen its stock price more than double this year to $143.61, following a 245% surge in 2024. The company's signature purple cables, which cost between $300-$500 each, have become essential infrastructure for AI data centers, positioning Credo to capitalize on the trillion-dollar AI infrastructure expansion as hyperscalers like Amazon, Microsoft, and Elon Musk's xAI rapidly build out massive computing facilities. What you should know: Credo's active electrical cables (AECs) are becoming indispensable for connecting the massive GPU clusters required for AI training and inference. The company...
Oct 17, 2025Vatican launches Latin American AI network for human development
The Vatican hosted a two-day conference bringing together 50 global experts to explore how artificial intelligence can advance peace, social justice, and human development. The event launched the Latin American AI Network for Integral Human Development and established principles for ethical AI governance that prioritize human dignity over technological advancement. What you should know: The Pontifical Academy of Social Sciences, the Vatican's research body for social issues, organized the "Digital Rerum Novarum" conference on October 16-17, combining academic research with practical AI applications. Participants included leading experts from MIT, Microsoft, Columbia University, the UN, and major European institutions. The conference...