I think VR and AR will be a nice interface for IoT, just like how voice is right now. AI, of course, will make the data analysis and decision making smarter. So on a high level overview, it will be AR/VR + sensors → IoT connectivity (5G, LPWAN, etc) → AI/ML → UI.
I don’t think we will fully appreciate the potential of VR and AR until we have faster internet connection. The data collected from these systems will be extremely rich and help make our algorithms even smarter. As always, I think these technologies will be focus on niche use cases at first (healthcare for example) then pan out to wider array of applications.