Knuth has declared that he will do no further development of TeX; he will continue to fix any bugs that are reported to him (though bugs are rare). This decision was made soon after TeX version 3.0 was released; at each bug-fix release the version number acquires one more digit, so that it tends to the limit pi (at the time of writing, Knuth's latest release is version 3.14159). Knuth wants TeX to be frozen at version pi when he dies; thereafter, no further changes may be made to Knuth's source. (A similar rule is applied to METAFONT; its version number tends to the limit e, and currently stands at 2.718.)
There are projects (some of them long-term projects: see, for example, the LaTeX3 project) to build substantial new macro packages based on TeX. For the even longer term, there are various projects to build a successor to TeX; see the Omega project and NTS.