Microsoft CEO Satya Nadella believes 2026 will be a pivotal year for AI, marking a shift from its novelty phase to widespread diffusion and real-world impact. He urges a focus on AI as a tool to amplify human potential, emphasizing product design and societal considerations. Nadella suggests the industry is moving beyond debates of 'slop vs. sophistication' to distinguishing spectacle from substance, highlighting the need to prove AI's practical applications.