00:00 Speaker A
Let’s move past uh this and start over talking about these federal AI regulations. What do you have there for us?
00:08 Speaker B
There will be a battle in AI regulation in 2026. It will be the federal government against 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 keep broadband funding or go after it for constitutional violations. That will be one battle. There will be another little battle between Republicans who believe in state’s rights and Republicans who believe in presidential authority. So look for that too. And then finally, there will be a battle between European regulators and American AI companies. and that will be a sequel to the various battles that the main American firms have been fighting with European regulation during the last five or 10 years.
00:54 Speaker A
And how does that play out among some of the biggest names we know in AI, whether it’s the hyperscalers, OpenAI, will they have a stake or a horse in this race?
01:10 Speaker B
Oh, yes, they are. They prefer not to be regulated. Uh they want a blank slate in which they can uh they can operate as they want and they want to deal with few regulations at the state level, ideally zero. For that matter, they wish not to follow European regulation or at least the onerous part of it. So uh so yeah, the big AI firms have to be under-regulated.
01:38 Speaker A
And your prediction number two, AI is going to become valuable on an industrial level and I think that kind of speaks to the trend that uh we had this miraculous technology that came out, but how are we going to use it? How will it improve our lives and how will it fit into businesses? That is finally becoming a reality.
02:00 Speaker B
It will finally be a reality. We spent years excited about the idea of AI. It’s the biggest science project in the world, but it hasn’t really moved the needle inside major organizations and 2026 will be the year. At the same time that the AI technological revolution is if anything seems to slow down a little with the models converging and plateauing power. at the same time as that happens, you will see the most powerful impacts made on large organizations that we have seen in the entire revolution.
02:37 Speaker A
This is because businesses are figuring out how to make use of AI.
02:40 Speaker B
Don’t put her on the sidelines and ask her to do side jobs. You have to weave it into the most important thing that businesses do, which are complex processes involving hundreds of people and hundreds of steps, all working together in great coordination. It’s hard to fit AI into this, but when you do, it will be really valuable.
03:04 Speaker A
I couldn’t agree more. The question is when. got to walk here. Prediction number three and I love this one. The best investments will be purp uh purpose specific models like small language models. And small language models abbreviate to SLIM. That’s your acronym there because we talk a lot about the big language patterns. How will the little ones stir things up?
03:26 Speaker B
I think this is the year we realize that AGI is the wrong target. We have been talking about it for years. Uh we were talking about making an AI that’s as smart as a person and I think that’s just the wrong direction to invest in. You see the success that the open models are having, the small models are having. This is the year when the public understands that we need practical AI, not experimental, theoretical AI. And so there will be less investment and less focus on building an AI that is comparable to a person and more on building an AI that can do a specific job really well. You don’t need it to do every job. You need it to do the work in front of you. In order for AI to become a practical technology that matters in large organizations, it may be much more focused than it is today.
04:14 Speaker A
Also, I like the idea that that will cost potentially a lot less money. And I’m wondering how that’s going to affect some of the bigger players like OpenAI, uh and then Claudemaker. Uh you know, how is this going to affect how is it going to affect these companies that are paying hundreds of billions of dollars soon to be trillions?
04:41 Speaker B
I think it opens the door for other vendors to become strong winners in the AI market. You don’t have to be the producer of human-scale intelligence in AI in order to be aaa big uh helper for businesses. You can see specialists in different fields, legal, healthcare, transport, refine their own AI models and create tremendous effect and great value for leading organizations without the degree of spending money that the same capital investment that our biggest AI firms have done. This will democratize the AI market.
05:22 Speaker A
I would like to see this. However, spending will continue, which brings us to prediction number four. 2026 will be focused on AGI scale powered by energy, data and processing.
05:41 Speaker B
Yes, you know, the scale game just doesn’t stop and it’s amazing how much money is spent. I liken it to putting railroads across the nation or the energy highway system or the moonshot. It’s an amazing amount of money and it won’t stop because investors are still willing to write big checks. However, I think over time we will see that there are other good ways to get a profit on AI besides creating the next moonshot. So I believe that the return on that investment will be a little smaller than some people are expecting, but there will be continued investment.
06:22 Speaker A
And here’s another one that I find really interesting. Prediction number five, AI winners will have better branding and distribution. And I think about a company like Open AI. I’m not trying to pick on them here, but uh they don’t have the uh the distribution. they are supported by Microsoft, but Microsoft is exploring other partnerships right now and you kind of own the hardware and they don’t necessarily have it right now. So how does this fit into your prediction?
07:05 Speaker B
I think the balance of power shifts towards those sellers who own the customer, own the eyeballs, have the power of the brand. I don’t think that OpenAI has the same kind of leading position in that future world. I think they have great technology, but the gap is narrowing. And if they cannot rely on having a great technological advantage, then the battle changes to a distribution advantage and being present on the desktop becomes the biggest asset and in that case, I expect other organizations to be even more successful.