2026 Predictions from the AI Optimist

Friends,

I hope you had a wonderful Christmas filled with meaningful human connection. I decided that this week’s edition could wait a day until the festivities had drawn to a close.

The Economic Shift Behind Everything I predict

AI is an economic change, not just a technical one. The cost of doing - processing, coordinating, executing, documenting - is dropping towards zero. This changes the economy at a foundational level because it means the way we create and store value changes.

When doing becomes abundant, value rebalances creating a new economic paradigm. Four things rise in importance: meaningful human connection, holding risk wisely, purpose, and proprietary data. These become the new sources of competitive advantage, the new foundations for strategy, the new measures of what matters.

This is the start of a new economic cycle: Impact economics.

For leaders, this creates an urgent practical challenge. You need space in the diary to create headspace - time to think about what this means for your organisation. That headspace allows you to unlock the value of AI. That value creates space in the P&L. That financial headroom funds the reinvention of your business for the new economy. It's a virtuous cycle, but it starts with making time to think and that is achieved by learning how to use AI yourself. I urge you to sign up to AI Night School as a priority.

The winners in 2026 won't be those who deploy the most AI. They'll be those who use AI to increase their ambition - solving bigger problems, pursuing bolder missions, creating the tomorrow we all want to live in.

Let’s get into it. Here's what I see coming.

1. Category of One Becomes the New Brand Strategy

Summary: Businesses will stop trying to be a better version of their competitors and instead focus on becoming a category of one - driven by AI's power to reinvent what a business fundamentally does.

Why I predict this: When AI handles the doing, competing on efficiency becomes pointless - everyone's AI can do the same things. The interesting question becomes: what are you for? Organisations that answer this boldly will find themselves in a category of one, defined by their unique purpose rather than their operational capabilities. When you're not fighting competitors on execution, you can pursue missions that were previously unthinkable. I'm excited to be working with my friend John Mulholland on bringing his Cat.One methodology into AI Optimist strategy thinking - he's been defining this pathway for years, and the timing couldn't be better.

If you are ready to reinvent your business for the new economy, let me know and I’ll connect you with John.

2. The Mavericks Will Become Professional, The Professionals Will Become Maverick

Summary: Solo entrepreneurs and small business owners will suddenly operate with the diligence of large corporates, while established professionals will cut corners in their rush to catch up.

Why I predict this: AI makes professional infrastructure accessible to everyone. The founder who couldn't afford a legal team can now generate robust contracts. The solo consultant who struggled with financial modelling can now produce sophisticated analyses. The floor is rising - mavericks will build professional-grade operations natively because AI makes it easy. Meanwhile, established organisations face a different dynamic. The best will discover that when AI handles compliance, documentation, and process, there's finally space for bold moves. They'll become more ambitious, taking creative risks because they have capacity to manage them properly. But many will tie themselves in knots - paralysed by questions about regulation, brand protection, and what AI means for their carefully accumulated assets. Falling behind the curve, they'll rush to catch up with shortcuts they'd never have tolerated before. The mavericks become professional; the professionals become maverick. Both groups converge on the same insight: when doing is handled, you can focus on being.

What do you think the impact of this is going to be?

3. Agile Evolves for the Age of Ambition

Summary: The agile community will embrace the opportunity to evolve their methodology for a world where AI handles execution and humans focus on direction.

Why I predict this: Agile has always been about responding to change and delivering value iteratively. The community understands adaptation is the point. When AI can generate, test, and iterate faster than any sprint cycle, the methodology faces a genuine evolution: how do human teams orchestrate AI-augmented delivery while maintaining coherent purpose? Expect frameworks that address when to trust AI output, when to override it, and how to tackle superhuman problems - challenges that were previously impossible because they required processing scale or coordination that human teams couldn't achieve. The destination is a new way of working where agile principles guide teams toward bigger ambitions, with AI handling the doing and humans focused on being.

I’m interested in how you see this space developing, let me know what you see.

4. The Year of the Fire Horse Will Bring On-Premise Back

Summary: On-premise infrastructure will rise like a phoenix as organisations pursue end-to-end ownership of their AI stack - data, intelligence layer, and software.

Why I predict this: As my co-founder at AI Night School, Ben Ford, puts it: if you don't own your AI, you are not aligned with your AI. This cuts to the heart of where we're heading. Organisations are realising that true AI advantage requires a self-sovereign stack - on-premise data, an intelligence layer you control, and software that serves your interests rather than someone else's. 2025 started with this focus emerging. 2026 will see renewed urgency as cybersecurity concerns accelerate the shift. When your AI is trained on your data, running on your infrastructure, and aligned with your purpose, you have something competitors cannot replicate. When it's rented from a third party, you're building on foundations you don't control. And fittingly, 2026 happens to be the Year of the Fire Horse - a rare 60-year cycle associated with bold transformation. The timing feels right.

Speak to Ben about his sovereign AI tech stack.

5. Frugal AI Will Become a Major Design Methodology

Summary: Organisations will realise that the value from AI often comes from precise, purposeful deployment rather than maximum capability, and "Frugal AI" will emerge as a serious design discipline.

Why I predict this: The hype cycle pushed toward maximum: biggest models, most parameters, most compute. But thoughtful practitioners are discovering something important - the right AI for the job often isn't the most powerful one. Frugal AI is about being intentional. What's the minimum intervention that creates maximum value? Where does AI genuinely outperform humans, and where does it just add complexity? This discipline requires understanding both the technology and the human systems it augments. As energy costs and sustainability pressures mount, organisations that master frugal AI will outperform those throwing compute at every problem.

If you want to gather a deeper understanding of Frugal AI design principles, I’m planning a workshop in February. Let me know and I’ll add you to the waiting list.

6. SMEs Will Reassess Their Microsoft 365 Dependency

Summary: More and more SMEs will question their reliance on Microsoft 365 and Copilot as other AI tools become distinctly more powerful and CEOs realise that one technology choice is constraining their ambition.

Why I predict this: The decision to standardise on Microsoft was sensible - consolidated security, familiar interfaces, integrated workflows. But that consolidation created lock-in, and the AI landscape is moving fast. Copilot has got better over 2025; alternatives have become exceptional. Leaders will start asking harder questions: Are we accessing the best AI for our needs, or just the AI bundled with our productivity suite? The licensing complexity isn't helping either. Organisations will start taking conscious control of their technology choices rather than drifting with defaults.

Speak to Ben about alternatives to Microsoft 365 and Copilot.

7. Personal Procurement Will Emerge as a New Category

Summary: A new category of companies will emerge from the agentic commerce space, bringing business-level due diligence to consumer decisions - from insurance switching to grocery shopping.

Why I predict this: In the business world, sophisticated procurement is normal: comparison, negotiation, compliance checking, value analysis. AI agents can now apply this same rigour to personal decisions. Why accept the renewal insurance quote when an agent can evaluate every option against your specific circumstances? Why research purchases manually when AI can do the analysis you'd never have time for? The companies that win here will combine technical capability with genuine advocacy - acting in the customer's interest, building trust through meaningful connection. This will reshape B2C markets that have relied on consumer friction and information asymmetry.

I’m doing a talk on this for Equal Experts in January called “Why I Fight With My Mum About Avocados.”

8. AI-Native Startups Will Be Valued for Their Operating System, Not Their Product

Summary: A startup like AI Night School will be offered a deal that isn't tied to revenue - because investors will recognise that the value lies in the AI-native operating system that's been built, not the product or customer base.

Why I predict this: Most AI startups add AI to an existing product - they're using AI for execution within a traditional business model. A handful are building differently: using AI as the engine that drives everything from product-market fit through to scale. The difference is profound. Traditional startups have products and customers. AI-native startups have those plus an operating system that compounds intelligence over time - proprietary data, learned patterns, workflows that improve with use. The product can pivot; the customer base can churn; but the operating system transfers and grows. Investors are starting to understand that they're not buying a product; they're buying a way of building.

If you’re interested in building your own AI Operating System speak to us.

9. AI Training Will Become De Rigueur

Summary: AI training will become a standard expectation as organisations realise it offers the quickest path to value and the safest path through risk.

Why I predict this: Every transformation requires people to change how they work. The difference with AI is the return is immediate and the stakes are high. Organisations that invest in capability building see results in weeks - people working faster, making better decisions, solving problems they couldn't approach before. Organisations that don't invest see two failure modes: expensive tools sitting unused, or worse, tools being misused in ways that create liability and erode trust. The calculation is becoming obvious. Training is how you capture value and manage risk simultaneously.

The good news is that this is easy, we have built the solution for you already. Speak to us about AI training for your organisation in 2026.

10. AI Hackathons Will Boom

Summary: AI hackathons will experience a massive surge as organisations realise that this technology requires people to experience it together.

Why I predict this: Hackathons powered digital transformation because they work - compressed experiences where people build together and have breakthrough moments. AI is even more suited to this format because understanding comes through doing. You don't grasp what AI enables by reading about it; you grasp it by watching your team build something impossible in a day. The a-ha moment when people see AI handle the execution - and realise they can now focus on problems worth solving - can't be delivered in a slide deck. It has to be lived. Organisations will invest heavily in hackathon formats as the fastest path to genuine AI adoption.

Speak to us about running an AI Hackathon for your team or company in 2026.

11. Philosophers Will Be in Demand

Summary: It will be a good year for philosophers as businesses realise that the decisions they need to make require a new depth of executive discussion.

Why I predict this: When AI handles execution, organisations face questions their strategy frameworks weren't designed to answer. What is authentic purpose when AI can mimic any positioning? How do you build genuine connection in an AI-augmented world? What does responsibility mean when decisions are made by systems you don't fully understand? These are the kind of questions philosophers have spent millennia exploring. Organisations will increasingly seek thinkers who can help leadership teams navigate this terrain: examining assumptions, clarifying values, reasoning about choices that matter.

Can you imagine having a Philosopher joining your exec team? Or do you already have one?

12. AI Optimism Will Gain Traction

Summary: AI Optimism will gain traction as people realise that both the doom predictions and the hype have masked the true need: doing the work to transition to a new way of working.

Why I predict this: We've had years of extremes. On one side, breathless predictions of superintelligent AI reshaping civilisation (see ai-2027.com). On the other, relentless product hype promising instant transformation. Neither has helped organisations actually adopt AI effectively. The growing movement of AI Optimism offers something different: a pragmatic path forward focused on the work. Not paralysed by doom. Not intoxicated by hype. Clear-eyed about what's changing, what it enables, and what it takes to get there. This will resonate because it's what leaders actually need.

Please share this newsletter widely, with those close to you and those you meet on the random walk through life. AI Optimism is as much a movement as it is a business philosophy and together we really can shape the tomorrow that we live in.

13. Community and Meaning Will Become Counter-Cultural

Summary: It will be a good year for religion and commune living as people seek community, meaning, and an alternative to acceleration.

Why I predict this: As AI raises existential questions about work and purpose, people will seek answers in places technology cannot reach. Religious communities offer something AI cannot: transcendence, tradition, and connection to something larger than ourselves. At the same time, we'll see a rise in commune-style living. When AI changes the economics of everything, some people will choose to pool resources, share costs, and find meaning in collective life rather than individual accumulation. This is a positive choice to prioritise what matters most: genuine human connection, shared purpose, and ways of living that aren't optimised for productivity. The AI era will make space for people who want to step off the treadmill, and that's a good thing.

Would you consider changing your lifestyle to a communal way of living? And most importantly, what would need to be true for you to make that change?

These 13 predictions were a fun reflection activity for me over the Christmas break. Think of them as ice breakers for our own reflections on what 2026 holds for you. Please do disagree, challenge and build on these in any way you want!

The next edition of the newsletter will be back to normal service on 1st Jan 2026.

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Have a wonderful Christmas break. Let the big questions percolate. We'll see you in the new year.

Hugo & Ben