Tech in 2026 – AI winners, losers and what happens next

Hello and welcome to this episode of the Times Tech podcast where each week we unpack how technology is reshaping business, culture and everyday life. I'm Katie Prescott, sitting here in the city, the city of London and a very, very happy new year to you.

I hope you had a fantastic Christmas break if you were lucky enough to have one and got all the gadgets that you wanted in your stocking. So on the random end of presents, I dodged giving my kids any tech this year and my daughter's got stick-in sets instead, real ones, which have been keeping us all entertained as we

try and work out what they like to eat. I hope other kids got luckier with their parents. But speaking of unwrapping presents, 2026 is shaping up to offer lots more gifts in tech. And I was thinking the other day, reflecting on the year just gone and believe It is only just over three years since the launch of ChatGPT, which propelled us really

into this new era of advanced AI, and that has just upended everything. I joined the times just before this all started, and I do feel very lucky to be on the tech beat following the twists and turns of it and meeting some of the larger-than-life characters that the sector seems to attract.

So we thought on today's episode as a good way to start the new year, we'd gaze into our crystal ball and ask what the year ahead really holds and what better way to do that than to speak to stalwarts of the venture capital industry, the people who place bets on which tech and which tech companies are going to be the stars of the future.

So by now you may have picked up that you're not hearing the dulcet tones of my co-host Danny Fortson. He is still enjoying a well-earned winter break, but we will be hearing from a recent chat that he had with an investor, John Callahan of True Ventures based in Silicon Valley,

that has funded companies such as Blue Sky. And I am joined in the studio today by Hannah Seal from Index Ventures, the transatlantic fund whose remarkable hit list includes Dropbox, Etsy, Figma and Revolut. Welcome to the podcast, Hannah. Happy New Year. Thank you. Happy New Year to you. Delighted to be here.

Kids didn't get stick insects for Christmas. Well, they've got sea monkeys actually, if you remember sea monkeys, which they're very excited about, they're growing very nicely. So guess our kids got similarly unlucky with their parents.

You're giving me inspiration for next year. That's the good one. I wanted to start on the big picture and perhaps picking up on a lot of the chatter at the end of last year, which is of course, are we currently in a

bubble with all of the money that's pouring into AI? And I just wondered what your reflections were on that. And I know it's a massive topic, so perhaps we separate out what's going on the public markets and the private markets.

But what's your view as we head into 2026? I'm pretty optimistic, actually. And I think it's easy to think it's a bubble because the numbers are just so big. And it is really like nothing we've ever seen before in terms of these sort of huge

volumes of the funding rounds and the valuations that are abounding. But my view is that AI is such a transformational technology that's touching not just software but also real world applications, physical world applications, robotics, healthcare, pretty much every industry globally will be touched in some way by AI in these huge subsets of GDP,

like healthcare and services that in many areas these huge valuations are actually justified because the impact that the technology is going to have is just so widespread and so transformational. So I do think some of these valuations are justified and are sort of based on the impact that AI is having. Having said that, there will be winners and

losers in AI. And I think this year we'll also see some consolidation and some players continuing to succeed in others where perhaps the quality of revenue was lower or the value they were adding was not what was thought of or the technology or product is becoming commoditized. I think some of those businesses will struggle. But at the other end, there'll be continued to be

these big winners with huge valuations. I guess the question is, when is the other end? Right, because I keep hearing from people that, yes, it is going to be transformational and have an enormous impact on everything.

But presumably between now and that point and those returns being delivered and the impact of the technology, there's going to be quite a bit of destruction or potential for destruction. Yeah. And I think what we'll see this year is last year it was a lot of of large enterprises sort of dabbling with AI.

And the boards were saying, oh, what are you doing with AI? You've got to do something with AI. There's this important technology. How are we transforming the business,

making it more efficient, increasing profits with AI? So every large enterprise was doing something, trying to build something themselves, messing around with open AI, doing lots of different things.

And there were kind of budgets flowing because everyone sort of was experimenting. And I think this year, there'll be a lot more scrutiny on AI budgets.

Okay, where are we actually seeing ROI? And I think that's where we'll see some of those sort of winners and losers actually starting to appear, which is the few companies that are really showing

like meaningful ROI for these businesses. They will continue to get the budgets and maybe increase budgets and the others will start to sort of see a lot of churn

from their customers. And actually it's going to be a difficult year for some of these other companies. So I think this year we will start to see the beginnings

of that sort of bifurcation of winners and losers in the AI application space. And how about the circular deals that we were seeing, which link what's been going on in the public markets

with the enormous valuations of say the Magnificent Seven and then the private companies such as Open AI and Anthropic, also with their massive valuations. I mean, I think that's something