Elite VCs' 2026 AI Road Signs

0:00It has been three years almost since ChatGPT launched and kicked off a massive wave of AI innovation. And every single year, venture capitalists have predicted really strong enterprise AI adoption. But a recent MIT survey in August found that 95 % of enterprises weren't getting a meaningful return on their investment in AI. We're going to talk about what that actually means and what venture capitalists say will be happening or will be different in the coming year as record amounts of money are getting poured into this industry. Before we get into that, I want to say a huge thank you to the sponsor of today's podcast, which is Delve.com.

0:35they help with compliance and if compliance is something that's slowing down the deals at your company whether that's SOC 2, HIPAA, GDPR there's a lot of you know compliance busy work that really kills momentum in deals so that's why I brought on Delve as a sponsor for the episode Delve uses AI agents to automate compliance they do end-to-end they collect evidence they fill out security questionnaires they customize controls to your actual business so you can get compliant in days and not months you also get one-on-one slack support from real security experts who respond fast. There is over a thousand fast growing companies who currently trust Delve to close deals faster and they help and essentially helps them stay compliant as they scale.

1:13So if this sounds interesting to you, go book a demo at Delve.com. I'll leave a link in the show notes where you can go check them out. It's been three years, like I mentioned, since opening I released chat GPT and with 95 % of companies saying they're not seeing a huge return on investment from AI initiatives. Now, I personally think that that could be companies doing it wrong or they're underreporting or maybe they don't know that every single one of their employees is currently using AI and seeing a lot of productivity gains. Regardless of all of that, I think the question that a lot of people are asking is when will enterprise recognize the real value from AI adoption and integration?

1:49So there was a big survey done recently by TechCrunch. They surveyed 24 enterprise-focused venture capitalists and an overwhelming consensus points to this next year, 2026 as the year when AI meaningfully breaks through. That means it's going to deliver measurable value. It's going to earn larger budgets and allocations. Venture investors have essentially been making these predictions for a few years. So I'll, you know, say, take everything with a grain of salt. And here's why they believe, though, that 2026 is going to be different. So Kirby Winfield, who is the founding general partner of Ascend, says that enterprises are starting to accept that large language models are not a cure-all just because a company like Starbucks can use Cloud to write internal CRM software doesn't mean it should.

2:32The focus is going to shift towards custom models, fine-tuning evaluations, observability, orchestration, and data sovereignty. Okay, that's an interesting insight. Molly Alter, who's a partner at Northstone, said that a subset of enterprise AI startups will evolve from product companies into AI consulting businesses. Many begin with a focused product like customer support or coding. Once they have enough workflows running on their platform, they can deploy internal teams to build additional use cases for customers. In effect, specialized AI products will increasingly become general purpose AI implementation partners.

3:06And I personally believe that, you know, a lot of times we're like, oh, you know, like what AI tools do you use for XYZ? I'm a huge believer that it's not going to, you know, in the near future, it's not really going to be what AI tools, but just like all the software you currently use is going to have AI built in. It already like a large portion of it does but I think we're going to see further integrations there so it's not like you know what specific AI tools just what tools do you use do they have AI in them if they're a good tool if they have a lot of you know customers if they are successful they're going to use more and more AI.

3:36Alexander von Tobel who's the founder managing partner at Inspired Capital said 2026 will be the year AI begins to reshape the physical world especially in infrastructure manufacturing and climate monitoring we're moving from reactive systems to predictive ones where failures can be detected before they happen. Marcy Vu, who's a partner at Greycroft, said, we are particularly excited about voice AI. Voice is a more natural, efficient, and expressive way for humans to interact with machines. After decades of typing and staring at screens, speech opens the door to rethinking interfaces, products, and experiences with voice as the primary mode of interactions.

4:11I 100 % will agree with Marcy on this ever since AI voice came out on chat GPT and a lot of other tools. It's one of my favorite ways to interact with AI models, especially if I'm driving or doing something where I need to be hands free. The voice mode is incredible. And sometimes it's a lot more natural for me to learn about a topic by talking to it than having to sit there and type my messages back and forth. Now, of course, like if I'm in an environment where I need to be quiet for some reason, or I don't want people to hear the whole conversation, I'll do that. But oftentimes if I'm in my office, if I'm driving, having a conversation is much faster and more natural.

4:44And I think I therefore get better responses. Lone Jeff, who is the managing director at Insight Partners said, we are closely watching how Frontier Model Labs approach the application layer. Many assumed labs would focus only on training models and leave application to others. Instead, we may see them ship turnkey applications directly into production across finance, law, healthcare, and education. This is very interesting. We're seeing OpenAI, right? They come up with Sora and it's like an entire, beyond just the video model, They came out with an entire social media platform. So we're seeing some of these bigger companies.

5:17You know, you could look at Anthropics Cloud where they created Cloud Code, which is, you know, a direct competitor to GitHub and a lot of other players. So we're seeing like these actual applications being built by the AI providers, which is interesting because I think it's very easy for them to see who their biggest consumers are, right? They, you know, Cloud could see that the biggest use case was developers using their code. There's a whole bunch of different software tools that were using Cloud to help with their coding tools. and so they just built their own. So I do think this is an interesting direction.

5:46Tom Hendrickson, who's a general partner at OpenOcean, said, if I had to describe quantum computing in one word for 2026, it would be momentum. Confidence in quantum advantage is growing as companies publish clearer roadmaps. That said, meaningful software breakthroughs still depend on further hardware advances. So when all of these people were asked what areas they were looking to invest in in the coming year, Emily Zhao, who's a principal at Salesforce Ventures, said, we're focused on two frontiers. AI moving into the physical world and the next phase of model research. I thought that was interesting.

6:17Michael Stewart, who's a managing partner at M12, said further data center technologies are a major focus. Over the past year, we've invested in what we think of as token factory infrastructure. This includes cooling, compute, memory, and networking innovations that improve efficiency and sustainability. John Lair, who is the co-founder and general partner at Workbench, said we're investing in vertical enterprise software where proprietary workflows and data create defensible defensibility, especially in regulated industries, supply chain and complex operational environments. Really looking at these, these very defensible regulated industries, things that are not easily disrupted.

6:53Aaron Jacobson, who's a partner over NEA said, we are reaching the limits of how much energy current GPU infrastructure can consume. We're interested in both software and hardware that dramatically improve performance per watt, including better GPU management, efficient chip, optical networking and thermal innovations. This is incredibly interesting. When asked all of these companies, because this is one of the biggest questions out there is about startups and their moats, they were all asked, you know, how do you determine whether an AI startup has a moat? Rob Biederman, who's a managing partner, Asymmetric Capital Partners said, in AI, defensibility comes less from the model and more from economics and integrations.

7:31We look for companies embedded in enterprise workflows with access to proprietary or continuously improving data and strong switching costs. Jake Flamingberg, who is a partner at Wing Venture Capital, said, I'm skeptical of moats based purely on model performance or prompting. Those advantages fade quickly. The key question is whether the company still matters if Frontier Lab releases a model that is dramatically better tomorrow. Molly Alter, who is a partner at North Zone, said, Vertical AI companies tend to build stronger moats than horizontal ones. Data moats are especially powerful where each new consumer improves the product.

8:05Workflow moats also matter, particularly in industries with consistent processes like manufacturing, construction, healthcare, or legal. Harsha Kapper, who is the director of Snowflake Ventures, said,

8:29There's a lot going on in the year 2026. I will make sure to keep you guys updated on all the latest companies. everyone that does raise money, what they're doing, what's happening. Thank you so much for tuning into the podcast today. As always, make sure to go check out Delve.com, the sponsor of today's episode. Thank you so much, and I hope you have a fantastic new year.