The American Action Forum is a Washington, D.C.-based non-profit policy institute that produces research and analysis on domestic, economic, and fiscal policies. In its new insight, “The Next Phase of AI: Technology, Infrastructure, and Policy in 2025–2026,” notes that policy priorities will focus on the increase in AI experimentation across industries, with broader adoption expected throughout 2026. Policy priorities the AAF explore include scaling infrastructure, accelerating AI innovation, and expanding AI use, especially around advanced models that will reshape operations, products, labor, and government services. According to the AAF research, “AI will represent 10 to 15% of IT spending in 2026, and 33% of enterprise software applications will include agentic AI by 2028.” The AAF also points to Physical AI – which embeds intelligence into the material world – as a growing part of the industry, with adoption expected to increase 80 % within two years, especially in manufacturing and defense.