January 2026 saw explosive growth in AI, with new model releases from China challenging US dominance, massive investments, and practical deployments across industries. Global spending forecasts hit $2.52 trillion for the year, up 44% year-over-year.
Major Model Releases
Chinese firms led innovation, releasing open-source models outperforming US benchmarks. Moonshot AI’s Kimi K2.5 excelled in coding and video understanding, beating Gemini 3 Pro on SWE-Bench and GPT-5.2 on VideoMMMU. Alibaba’s Qwen3-Max-Thinking topped “Humanity’s Last Exam,” with tool selection and conversation memory features.
Google advanced Gemini 3 as the default for AI Overviews, enabling seamless chat handoffs and serving 75 million daily users. xAI expanded Grok Imagine to 10-second video generation. Other notables included GPT-5.2 for reasoning and Claude Opus 4.5 for coding.
Investments and Partnerships
Amazon negotiated up to $50 billion investment in OpenAI, signaling big tech consolidation. Nvidia invested $2 billion in CoreWeave for AI factories and backed Synthesia at $4 billion valuation.
Meta’s AI spending hit $135 billion but boosted ad sales, while ServiceNow partnered with Anthropic. These deals highlight enterprise AI acceleration.
Product Launches and Tools
Google rolled out “Personal Intelligence” in Gemini, using Gmail, Photos, and history for personalized answers. Yahoo launched Scout, an AI answer engine with Claude and user data grounding.
OpenAI debuted Prism for scientific writing with GPT-5.2 and value-sharing for startups. Fujitsu’s platform enabled autonomous generative AI management.
Trends and Concerns
Self-improving models emerged as the next frontier, with recursive refinement raising governance issues. AI drove 758% ecommerce traffic surge, but RAG reasoning collapse and QA needs surfaced.
China’s advances, like school AI curricula, intensified the global race. Expect more multimodal and agentic AI in 2026.