00:00 Speaker A
Let’s review that and start at the top by talking about these federal AI regulations. What do you have here for us?
00:08 Speaker B
There will be a battle over AI regulation in 2026. It will be the federal government versus the states and you saw that in Trump’s recent announcement. There will be conflict over whether states are allowed to regulate and whether the federal government will withhold broadband funds or sue for constitutional violations. It will be a battle. There’s going to be another little battle between the Republicans who believe in states’ rights and the Republicans who believe in presidential authority. So look for that too. And then ultimately there will be a battle between European regulators and American AI companies. and this will be a continuation of the many battles that large American companies have waged against European regulations over the last five or ten years.
00:54 Speaker A
And how is that playing out among some of the biggest names that we know in AI, whether it’s the hyperscalers, whether it’s OpenAI, are they going to have a stake or a horse in this race?
01:10 Speaker B
Oh, yes, they are. They would prefer not to be regulated. Um, they would like to have a blank slate that they could operate on at will and they would like to deal with very few regulations at the state level, ideally zero. They would also like not to respect European regulations, at least in their most onerous part. So yes, big AI companies want to be underregulated.
01:38 Speaker A
And your prediction number two, AI will become valuable at an industrial level and I think that speaks to the trend that we’ve had this miraculous technology that’s come out, but how are we going to use it? How will it improve our lives and how will it fit into businesses? It’s finally becoming a reality.
02:00 Speaker B
This is finally going to be a reality. We’ve spent years excited about the idea of AI. It’s the largest scientific project in the world, but it hasn’t really shaken things up within large organizations and 2026 will be the year. Along with the AI technology revolution, it seems like something is slowing down a bit with models converging and power leveling off. at the same time, you will see the most powerful impacts on large organizations that we have seen in the entire revolution.
02:37 Speaker A
This is because businesses are looking to use AI.
02:40 Speaker B
You don’t push him aside and ask him to do secondary tasks. You need to integrate it with the most important activities of businesses: complex processes involving hundreds of people and hundreds of steps, all working together in great coordination. It’s hard to integrate AI into this, but when you do, it will become really valuable.
03:04 Speaker A
I couldn’t agree more. The question is when. I have to move forward here. Prediction number three and I love this one. The best investments will be models specific to a specific purpose, such as small language models. And the small language models shrink to thin. That’s your acronym there, because we talk a lot about big language models. How will the little ones shake things up?
03:26 Speaker B
I think this is the year we realize AGI is the wrong target. We’ve been talking about this for years. Um, we were talking about creating AI as intelligent as a person and I think that’s just not the right direction to invest in. You see the success of open models, small models. This is the year the public understands that we need practical AI, not experimental theoretical AI. So there will be less investment and less emphasis on creating human-like AI and more on creating AI that can do a specific job very well. You don’t need it to do all the work. You need it to do the work in front of you. In order to make AI an important practical technology in large organizations, it can be much more focused than it is today.
04:14 Speaker A
Well, I like the idea that it will potentially cost a lot less money. And I wonder how this is going to affect some of the bigger players like OpenAI, uh, and then Claudemaker. Um, you know, how is this going to affect these companies that are just spending hundreds of billions of dollars, soon to be billions?
04:41 Speaker B
I think this opens the door for other vendors to become powerful winners in the AI market. You don’t need to be a creator of human-scale intelligence in AI to be a big help to businesses. You could, you could see specialists in different fields, legal, healthcare, transportation, tweaking their own AI models and creating a huge effect and great value for large organizations without the same degree of expenditure of money as the same capital investment that our largest AI companies have made. This will democratize the AI market.
05:22 Speaker A
I would love to see that. Nevertheless, the spending will continue, which brings us to the fourth prediction. 2026 will be focused on AGI scale powered by power, data and processing.
05:41 Speaker B
Yeah, you know, the ladder game just doesn’t stop and it’s staggering how much money is being spent. I liken it to laying railways across the country, to the electric highway system, or to the Moonshot. This is an incredible amount of money and it’s not going to stop because investors are still willing to write big checks. However, I think over time we will see that there are other great ways to get ROI from AI other than creating the next moonshot. So I think the returns on investment will be a little bit lower than some people expect, but the investments will continue.
06:22 Speaker A
And here’s another one that I find really interesting. Fifth prediction: AI winners will benefit from better branding and better distribution. And I’m thinking of a company like Open AI. I’m not trying to pick on them here, but they don’t have the distribution. they’re backed by Microsoft, but Microsoft is currently exploring other partnerships and you kind of have to own the hardware, which they don’t necessarily have at the moment. So how does this fit into your prediction?
07:05 Speaker B
I think the balance of power is shifting to the suppliers who own the customer, who own the eyes, and who own the brand power. I don’t think OpenAI has the same kind of leading position in this future world. I think they have great technology, but the difference is narrowing. And if they can’t count on a major technological advantage, then the battle shifts to a distribution advantage and desktop presence becomes the biggest asset and in this case I would expect other organizations to be even more successful.
