Here's what's up for Jan. 26, 2026.
• AI Tries Product Development
• Europe Prepares for a Nightmare Tech Scenario
• AI’s Uneven Impact: Productivity Up, Jobs Down

Good morning. The course of Vasant Dhar’s life changed in the late 1970s with a demonstration of Internist, an early computer-assisted decision system used in medical diagnosis.

"There was a physician with snow white hair, and a white coat puffing a cigar and he was quote-unquote, discussing a case with 'Internist,' Dhar said, recalling his days as graduate student at Carnegie Mellon. The physician prompted the system to explain why it had asked him a particular question about a patient’s case. Internist responded that the evidence the physician had shared was consistent with several hypotheses, and the new question would help it discriminate between the top two. 

Dhar’s latest book, "Thinking With Machines," was conceived as a guide for individuals, businesses, and society as they navigate the world of AI. The time to think about this is now, as AI usage creeps higher and its impact on the job market grows:

• A new Gallup poll shows that frequent use, defined as using AI at work at least a few times a week, inched up in the fourth quarter 3 percentage points to 26%. The poll found that the total AI user base increased most in finance and professional services, while retail was flat and manufacturing showed a three-point increase.
   
• Morgan Stanley research shows that British companies say AI led to 8% net job losses over the past 12 months, which is faster than international peers, Bloomberg reports. Those companies are boosting productivity with AI, although the U.S. is matching those gains while adding jobs, according to the study. More on both studies down below.

I spoke with Dhar recently about what it takes for companies to make AI-driven change work for them, especially when it comes to leadership.  Read on for edited highlights of our conversation.

WSJ Leadership Institute: You view AI as more than a tool. Please explain.

Dhar: Some people think AI is just another tool … and that's fair, but I think it misses a larger point. If you assume that AI is the next general purpose technology, like the internet or electricity, the fundamental difference between them is that those previous technologies were ones which we completely understood and could control. We completely understood the physics of those things and could control them completely. There was no question of these things [spinning] way out of control. AI is different. It's not just a tool. It's a species that's developing along with us, right? And in many ways it is developing its intelligence at a faster rate and it will surpass our capabilities. In many areas it already has. And so to just call it a tool I think misses that point. It’s got a mind of its own, you know, and one of the reasons I wrote the book, and called it  Thinking With Machines, is because that is the future of humanity. There is no opting out of this.

WSJLI: How do people benefit from the rise of AI?

Dhar: I think there is an impending bifurcation of humanity, in which people who have a certain level of knowledge can amplify it, can use the machine as an amplifier. People who don't have that, and just want the answers from the machine are using it as a crutch and that's a race to the bottom… I wrote this book as a call to action. It is a recognition that AI … is developing at an incredibly rapid clip, and what seemed like science fiction even two or three years ago is real now.

WSJLI: What distinguishes people who use AI in those different ways, and how do they stay on the right side of that divide?

Dhar: Phil Tetlock has been studying forecasting for a long time. He says some people, a very small minority, just have an ability to make really good predictions about things far into the future. He studied these people. They have an obsessive curiosity. They have a frequent update of their belief system. Superforecasters have an ability to calibrate themselves and start answering questions in the right ballpark. If you ask me what is the probability of a recession next year, am I going to start looking at employment statistics and what the Fed is doing or am I going to step back and say how many recessions have their been in the last hundred years and use that as a benchmark to then revise my estimates up or down? Those are the sort of qualities that make humans particularly special, that are really worth emulating and training ourselves on, because as the machine becomes better and better it forces human beings to update their game as well.

Well, you know, that's always been true of technology, but it's become much more pressing now. We're dealing with this alien species that is getting smarter than us in many ways. And the question becomes, what value are humans adding, and how can they work best with machines. And it’s this  inherent curiosity, the creativity. The more, you know, the more you get amplified by the machine, And so, that's what I see as the challenge for us … better education, you know, cultivating curiosity, grounding yourself in the right place and then having the expertise and the knowledge to critique the machine.

WSJLI: Beyond the individual, how can companies prepare for these changes?

Dhar: It has to come from the CEO. It can’t be delegated. And the question that business leaders face is not just how can we make the back office more productive or, how can we reduce the number of people? It's more like rethinking the entire business and what it even means to make the product, what it means to interact with customers. How's that going to change? How is distribution going to change? To see where the puck is headed in a much larger sense and then making gradual investments. People talk about the ROI. How do you get the ROI from AI? And my response to that always is that in order to get the R you first have to make some and get a sense of where success is most likely. But it's a problem brought with uncertainty, right? The pace at which it is moving is also so fast that sometimes you might be just better off waiting a month as opposed to starting now. Those are the kinds of really taxing questions in the CEO space and there are no easy answers.

Manufacturers say that AI is fundamentally changing how new products are created. The WSJ's John Keilman reports how AI is letting companies speed-run a process that can often be a slog.

AI tools have helped...

• Procter & Gamble create new scents for body washes, laundry beads and home fragrances.
• Mars design a thinner-walled bottle for its Extra brand chewing gum that saved 246 tons of plastic.
• 3M build a sanding disc that optimizes dust collection and grinding performance.

Paint manufacturer PPG built a deterministic AI system grounded in chemistry, enabling it to explore countless paint formulations and predict how they would perform.

Rising tensions with the U.S. are pushing Europe to consider what once seemed unthinkable: reducing dependence on American tech giants that dominate its digital infrastructure.

It's a tall order. In 2024, European customers spent nearly $25 billion on infrastructure services from the top five U.S. cloud companies, or 83% of the total market in Europe, according to research firm IDC.

Yet fears of a sudden cutoff, from cloud services to email, have accelerated calls for “technological sovereignty,” the WSJ reports.

The European Parliament on Thursday passed a “technological sovereignty” resolution that supports using public procurement criteria to favor European products where possible and proposes new legislation to promote European cloud providers.

Speaking of digital sovereignty, TikTok’s new U.S. joint venture was quick to make changes to the privacy policy, updating it to allow for the collection of precise location data of its 200 million American users, an expansion from the previous “approximate” data, BBC reports. The venture will also gather more information on users’ interactions with TikTok’s AI tools.

Yes, more people are using AI at work more frequently, according to that recent Gallup poll I mentioned up top, but there's more to it.

• AI adoption remains heavily concentrated in knowledge-based industries, with tech, finance and higher education far ahead of retail, manufacturing and healthcare, according to Gallup.
• Finance and professional services saw the biggest jumps in Q4.
• Leadership uses AI far more frequently than managers or individual contributors.

A Morgan Stanley survey of firms that have been using AI for at least a year finds that the technology is boosting productivity for UK and U.S. companies. Companies in both nations saw productivity increases of 10.5% or more, Bloomberg reports, citing the data. 

But the outcomes diverge:

• The U.K. reported 8% net job losses tied to AI.
• The U.S. added more jobs than it cut.

Why the difference? Bloomberg reports that U.K. employers are less likely to hire alongside AI investments, and that high payroll costs, slow growth and rising youth unemployment are magnifying AI’s disruptive effects.

Quantum-computing company IonQ is buying U.S. chip maker SkyWater Technology for $1.8 billion in cash and stock, aiming to build a “vertically integrated quantum platform” and speed manufacturing. IonQ, which specializes in so-called trapped-ion quantum computers, says the acquisition positions it to become the “Nvidia of quantum.”

Last year, IonQ signed a more than $1 billion deal for the U.K. startup Oxford Ionics. It also announced deals for Lightsynq Technologies and Capella Space.

In the AI Cold War emerging between the U.S. and China, military use of the technology has quickly become one of the hottest areas of competition.

The WSJ's Josh Chin reports how engineers at a top Chinese military-linked university have been studying drone-swarm combat by modeling defensive and offensive drones on hawks and doves, the WSJ's Josh Chin reports. 

Beijing sees AI-driven unmanned warfare as transformative. But risks remain: the technology may fail in real combat. Or it might work too well, acting beyond human control.

In a software war, hardware counts. Chinese factories already are capable of pumping out a million or more cheap, capable drones every year. With its weaker tech supply chain, the U.S. produces drones in the tens of thousands, and at prices many times higher.

AI company Synthesia, which specializes in text-to-video generation, raised $200 million at a $4 billion valuation, WSJ reports, adding fresh capital to boost its enterprise business. Synthesia said it will use the new funding to build training software where AI agents can answer employee questions, enable role-play scenarios, and offer personalized guidance. Google Ventures led the round, joined by Nvidia’s NVentures and other investors.

Nvidia is investing $2 billion in CoreWeave to add more than 5 gigawatts of AI computing capacity by 2030, Bloomberg reports. As part of the arrangement the AI cloud services provider will be among the first to deploy new Nvidia products. Nvidia, already a CoreWeave investor, last year agreed to buy back $6.3 billion in any unused cloud capacity from the firm through 2032.

Protests are expected to continue in Minneapolis and across the country in response to the fatal shooting of a 37-year-old man over the weekend—the second such killing of a U.S. citizen by federal agents in the city in two weeks. (WSJ)

President Trump declined to say whether the federal officer who fatally shot a man in Minnesota this weekend had acted appropriately and said the administration was reviewing the incident. (WSJ)

Federal agents claimed Alex Pretti, 37, forced their hand, alleging he “violently resisted” disarmament until the officers fired “defensive shots.” Bystander footage appears to tell a different story. (WSJ)

Gold prices tore past another milestone, with tariff threats against Canada and the possibility of a fresh U.S. government shutdown adding fuel to the metal's historic rally. (WSJ)

January 29, 2026 at 1p.m. ET

Join us for a deep dive into the challenges that CFOs and other top executives are seeking to overcome, including the impact of tariffs and geopolitical conflicts on corporate finance and private equity.

Have a question you’d like to submit in advance? Send your question to wsjcorporate@dowjones.com and we’ll address your questions during the Q&A.

The WSJ CIO Journal Team is Steven Rosenbush, Isabelle Bousquette and Belle Lin.

The editor, Tom Loftus, can be reached at thomas.loftus@wsj.com.