According to Fortune, a survey of unicorn founders, VCs, and executives predicts that 2026 will be the year the AI hype cycle definitively pops. Key voices like Vanta’s Stevie Case and Menlo Ventures’ Deedy Das forecast a brutal shift from “impressive demos” to “measurable ROI,” with companies only paying for AI that increases revenue or automates real work. The survey suggests a lot of AI valuations will take markdowns, squeezing compensation at startups, and that the $200 billion invested in a single year must produce trillion-dollar outcomes—a historically improbable feat. Furthermore, 645 Ventures’ Nnamdi Okike predicts financial markets will begin reckoning with AI business models by year’s end, leading to reduced valuations in 2027. The collective view is that the free money for potential is drying up.
Bubble Debate Rages On
Here’s the thing: everyone seems to agree there’s a bubble, but the predictions on its fate vary wildly in their specifics. Some, like Sendbird’s John Kim, point to insane investment timelines—48 hours to decide on tens of millions—as the clearest bubble indicator. Others, like Jared Quincy Davis of Mithril, see the narrative shifting from a single “God model” dominating to a “menagerie” of thousands of specialized models. So, is the whole sector doomed? Not exactly. The consensus is that the bubble is largely in the “thin application layer.” As Kamran Ansari from Infinity Ventures puts it, foundation models like OpenAI are probably fine; the real risk is the dozen companies all doing AI-powered accounting. The survivors, according to Helios AI’s Francisco Martin-Rayo, will be vertical AI platforms with real margins, real customers, and proprietary data. Basically, the boring, useful stuff wins.
Agents, ROI, and the Uncanny Valley
Two major themes for 2026 keep popping up: the rise of AI agents and the desperate need for ROI. 2026 is “undoubtedly the year of the agent,” says DeepL’s Stefan Miedzianowski. But there’s a huge caveat. Prolific’s Phelim Bradley warns that 90% of AI agents fail within 30 days of deployment, and success will hinge on human-AI collaboration frameworks, not full autonomy. It’s a classic tech story: the promise of automation leads to more human oversight, not less. Meanwhile, the ROI pressure is everywhere. AI will need to “prove itself in the numbers.” This is pushing predictions into fascinating territory—like AI dissolving the boundary between finance and operations so models execute tasks, not just give advice. Or, as Rudina Seseri from Glasswing Ventures predicts, AI products finally crossing the uncanny valley to become the new normal. But will consumers really prefer an AI customer service rep over a human for their health insurance? Torch Capital’s Jon Keidan thinks so. I’m… skeptical.
The Human Counter-Reaction
Perhaps the most intriguing thread in all these predictions is the anticipated human backlash and counter-movement. In a world flooded with AI-generated content, or “slop” as Amy Wu Martin calls it, social networks are predicted to crack down hard with more guardrails. And in a twist, Felicis’s Peter Deng thinks in-person connection will become a premium product category. Think about that. In an AI-saturated world, real human interaction becomes a scarce, valuable commodity. We might see an explosion of companies facilitating richer in-person experiences. It’s a poetic and probably accurate prediction. Technology often creates the conditions for its own antithesis to become prized. So while the billboards on the 101 in San Francisco might stay up as a “live scoreboard” for the sector, the real story might be happening away from screens altogether. The bubble might deflate, the funding might tighten, but the human response to all this tech could be the most interesting shift of all.
