Executive summary
By 2026, three forces converge: (1) industrial-scale AI infrastructure (e.g., OpenAI–Broadcom’s plan to deploy ~10 GW of custom accelerators beginning H2-2026), (2) agentic AI in enterprise workflows (e.g., Salesforce’s Agentforce integrations with OpenAI/Anthropic), and (3) regulatory/governance hardening (EU AI Act’s full applicability on Aug 2, 2026; EU Entry/Exit System fully operational by Apr 10, 2026). Together they reshape state capacity, corporate operating models, labor composition, identity/border management, and the power grid itself. Migration and Home Affairs+3Reuters+3Reuters+3
Government: more capable states, tighter guardrails, new bottlenecks
1) Digital border & identity regimes normalize.
The EU’s biometric Entry/Exit System (EES) entered service in Oct 2025 and is slated to be fully operational across external border points by Apr 10, 2026. Expect shorter stamp queues but longer initial enrollments, with higher reliance on biometric data stewardship, redress processes, and cross-system interoperability (e.g., VIS/ETIAS). Member-state performance will vary by deployment maturity and staffing. eu-LISA+1
2) The AI rulebook bites.
The EU AI Act becomes fully applicable on Aug 2, 2026 (with certain exceptions), forcing ministries, regulators, and public-sector vendors to operationalize risk classifications, fundamental-rights impact assessments, logging, and conformity procedures. Governments will need staffed AI offices, notified bodies, and sector regulators ready to audit high-risk public deployments (health, policing, welfare), and to oversee GPAI model duties introduced earlier in 2025. Non-EU governments will feel “Brussels effect” pressure via procurement and data-transfer clauses. Digital Strategy EU+2alexanderthamm.com+2
3) Capacity meets constraints.
AI-heavy workloads drive grid and water planning into the policy mainstream. IEA estimates data-centre electricity demand more than doubling by 2030, with AI the principal driver—pushing 2026 national plans toward substation siting, demand-response, and expedited interconnect queues. Expect incentives for efficient inference, grid-friendly scheduling, and siting near renewables or industrial waste-heat sinks. IEA+2IEA+2
4) Procurement and sovereignty.
Large public clouds remain essential, but 2026 brings multi-sovereign strategies: EU and allied states weighing domestic fabs, sovereign AI “factories,” and specialized colocation to mitigate supply risk from a handful of vendors. Custom silicon programs (e.g., OpenAI–Broadcom) reinforce the geopolitical nature of compute procurement, networking, and power. Reuters
Business: agentic workflows, compute reshoring, and cost physics
1) From copilots to agents at scale.
By 2026, agentic AI moves from pilots to line-of-business deployment. Salesforce’s Agentforce 360—deeply integrated with OpenAI/Anthropic models—hints at sales, service, and commerce teams running semi-autonomous tasks (prospecting, ticket triage, returns, analytics) with human oversight in Slack/CRM. Firms will standardize guardrails, observability, and RACI for agents; vendors that combine LLMs with structured business objects (catalogs, entitlements, policies) will win share. Reuters
2) Verticalized AI compliance.
With the EU AI Act enforceable, multinational enterprises adopt “compliance-by-design”: model cards, data lineage, incident reporting, and third-party risk controls embedded into MLOps/DevSecOps. Expect contract riders demanding AI risk documentation from suppliers and channel partners to preserve EU market access. Digital Strategy EU
3) Compute strategy becomes board-level.
The move toward custom accelerators and high-bandwidth networking (e.g., Broadcom’s roadmap; OpenAI’s 10 GW plan starting 2026) reshapes cost curves and availability. Strategic buyers will diversify across Nvidia/AMD/custom ASICs, evaluate Ethernet vs. InfiniBand topologies, and pre-book power plus water. Outcome: CFOs manage “cost-per-token/task” KPIs; CTOs optimize training vs. inference placement; CISOs validate isolation/tenancy claims. Reuters+1
4) Energy & location arbitrage.
Enterprises site compute near low-carbon, low-cost power and friendly interconnects, often outside Tier-1 metros. 2026 will see more behind-the-meter renewables, waste-heat reuse, and demand-response contracts. Organizations with flexible inference windows exploit time-of-day pricing to reduce OpEx. IEA
5) Labor mix and productivity.
Agent adoption compresses cycle times and reduces routine cognitive work. Net effects:
- Higher output per employee; role rebundling toward judgment, exception handling, and customer intimacy.
- Hiring shifts to AI product owners, evaluators, prompt/tooling engineers, data governance leads.
- Upskilling becomes continuous, with strong ROI for workflow redesign (not just tool rollouts).
(Evidence base: enterprise agent launches and model integrations in 2025; regulatory compliance requirements entering force in 2026.) Reuters+1
Society: identity, inclusion, resilience, and trust
1) Everyday AI and service access.
By 2026, consumer-facing agents appear in banking, insurance claims, retail returns, and local public services. Benefits include faster response, multilingual access, and assistive tech improvements. Risks: automation-induced denial loops (when models misinterpret documents), explainability gaps, and complaint escalation fatigue. EU rules on transparency, risk management, and human oversight help, but require real enforcement muscle. Digital Strategy EU
2) Borders and mobility.
Travelers to Schengen encounter a biometric-first border experience as EES completes rollout by April 2026. Expect initial congestion at some crossings during peak seasons, gradually offset by repeat-traveler speedups. Public debate will center on data retention, consent, and error correction for biometric mismatches. Migration and Home Affairs
3) Power, prices, and place.
Expanding AI data-centre demand influences local electricity prices, water use, and siting politics. Communities will negotiate benefit-sharing (jobs, district heating) vs. burdens (grid constraints, land use). Transparent impact reporting and community-benefit agreements become standard asks. IEA+1
4) Information integrity & safety.
More capable models raise synthetic media risks in elections and markets. Expect wider deployment of provenance standards, watermarking, and liability frameworks, especially for “high-risk” civic contexts under the EU AI Act. Civil society will push for appeal paths and model accountability in public-facing decisions. Digital Strategy EU
Cross-cutting risks and dependencies (2026)
- Supply-chain execution risk: Delays in custom accelerator projects (packaging, yields, networking optics) or grid interconnects could constrain planned agent rollouts and inference SLAs. Reuters
- Regulatory fragmentation: Divergent global rules (EU AI Act vs. other regimes) complicate cross-border deployments; expect least-common-denominator governance baselines. Digital Strategy EU
- Power & cooling: Electricity and water constraints intensify; firms must model energy per request and adopt efficiency metrics as first-class product requirements. IEA
- Security & model abuse: As agents gain tools, policy isolation, audit trails, and continuous red-teaming are mandatory. (Implied by enterprise agent platform launches with compliance positioning.) Reuters
Plausible 2026 scenarios
- “Smooth scale-up.” Power procurement, networking, and compliance keep pace. Governments showcase quick wins (digital permits; benefit administration). Enterprises report double-digit productivity gains where workflows were redesigned.
- “Patchy progress.” Some regions face power bottlenecks; public backlash stalls data-centre siting. Agent deployments concentrate in back-office and customer support, with slower expansion into regulated front-line use.
- “Regulate first.” A high-profile model failure in a public service or election triggers urgent rule-tightening, slowing deployments until audit/assurance tooling matures.
What leaders should do now (practical 2026 checklist)
- Map regulatory exposure to the EU AI Act: classify use-cases, draft model/data documentation, and line up notified-body pathways for high-risk systems. Digital Strategy EU
- Stand up an “AI Ops + Risk” function: runtime monitoring, incident response, and human-in-the-loop policies for agents (escalation paths, kill switches). Reuters
- Secure compute & power: diversify silicon/network stacks, pre-book capacity, and tie agent SLAs to energy budgets; explore demand-response and heat-reuse options. Reuters+2Reuters+2
- Redesign work, then tool it: re-write SOPs around agents; invest in change-management and continuous upskilling for affected roles. Reuters
- Prepare for border & identity shifts (travel, logistics, hiring): update compliance and traveler comms for EES procedures and data rights.
