Microsoft CEO Satya Nadella wants an end to the term ‘AI slop’ and says 2026 will be a ‘pivotal year’ for the technology – but enterprises still need to iron out key lingering issues

Microsoft CEO Satya Nadella believes 2026 will mark a “pivotal year” in the evolution of AI, but the industry needs to shelve discussions over “slop” for real progress to be made.

In a blog post before the turn of the new year, Nadella insisted businesses are making solid progress with integration of the technology, with many having “moved past the initial phase of discovery” and now entering a “phase of widespread diffusion”.

“As I reflect on the past year and look toward the one ahead, there’s no question 2026 will be a pivotal year for AI,” he wrote.

“We are beginning to distinguish between “spectacle” and “substance”. We now have a clearer sense of where the tech is headed, but also the harder and more important question of how to shape its impact on the world.”

Cutting through the marketing-style rhetoric here, Nadella suggested the technology is now at a point where enterprises are delivering value with AI, but does that all add up? Not entirely.

Return on investment (ROI) with AI tools is still a key hurdle for enterprise IT leaders, for example. A recent study from SAP noted that ROI is improving at a promising pace but businesses are taking a fragmented approach to integration, creating longer-term challenges and impacting bottom lines.

This is an area Nadella pointed to in his 2025 roundup post, noting that he expects a key issue for IT leaders in the year ahead to be “model overhang”, whereby the capability of AI models and various tools outpaces the ability for teams to use it effectively.

Simply put, businesses aren’t fully maximizing their use of AI and they’re leaving some gas in the tank that could otherwise be used to fuel more progress.

To counter this, Nadella pointed to Steve Jobs’ famous “bicycles for the mind” metaphor as an example. Nadella said, AI should be used as a “scaffolding for human potential” in the same way Jobs described the ability for computers to enhance human capabilities.

“What matters is not the power of any given model, but how people choose to apply it to achieve their goals,” he explained.

The ‘AI slop’ conundrum

Notably, Nadella insisted the industry needs to shelve discussions about “AI slop” if progress is to be made on unlocking full value from AI.

“We need to get beyond the arguments of slop vs sophistication and develop a new equilibrium in terms of our “theory of the mind” that accounts for humans being equipped with these new cognitive amplifier tools as we relate to each other,” he wrote.

“We will evolve from models to systems when it comes to deploying AI for real world impact.”

Describing AI as a “cognitive amplifier” does run counter to research by Microsoft last year which found the technology is having an adverse effect on cognitive function and critical thinking.

Regardless, what this suggests is that IT leaders should focus on applying AI in instances where there are clear-cut use cases for individual teams and needs – the technology isn’t a catch-all tool for use across the enterprise.

That’s easier said than done, however, particularly when one considers the hype surrounding the technology. Concerns over outputs and whether AI is delivering on the promises made by big tech providers have become a recurring theme over the last year – particularly since the advent of agentic AI.

Microsoft, along with competitors such as Amazon Web Services (AWS) and Google, have made significant strides with agentic AI across 2025, rolling out a range of services and new tools. Indeed, the tech giant’s annual Ignite conference in November was swamped with agentic AI product launches.

But as ITPro reported in October, agentic AI isn’t quite matching the hype. OpenAI co-founder Andrej Karpathy poured cold water on the trend, describing the output of AI agents as “slop” and insisting the technology isn’t living up to expectations.

The issue of AI slop is already having an adverse impact on businesses across an array of industries. Open source project maintainers, for example, are encountering a huge surge in AI-generated “slop security reports”, as ITPro reported in late 2024.

Elsewhere, a study published in Harvard Business Review last year found 40% of US employees encountered AI-generated “workslop” on a monthly basis.

This shoddy, AI-generated work content “masquerades as good work but lacks the substance to meaningfully advance a given task”, researchers noted.

Employees polled by researchers said around 15% of all work-related content they receive from colleagues falls under the “workslop” category.

FOLLOW US ON SOCIAL MEDIA

Make sure to follow ITPro on Google News to keep tabs on all our latest news, analysis, and reviews.

You can also follow ITPro on LinkedIn, X, Facebook, and BlueSky.