Monetizers vs. manufactures: How the AI market could splinter in 2026 (www.cnbc.com)

Investors are facing potential market segmentation in the AI sector by 2026, as recent fluctuations in tech stocks signal the need for differentiation among AI investments. The last quarter of 2025 was marked by significant volatility, with concerns over an AI bubble as speculative investments surged and valuations became unsustainable. Stephen Yiu, chief investment officer at Blue Whale Growth Fund, highlights that the AI landscape can be divided into three categories: private startups like OpenAI, public companies spending on AI, and AI infrastructure firms benefiting from increased spending from giants like Amazon and Microsoft. This impending segmentation is significant for the AI/ML community as it underscores the evolution of business models within Big Tech, which are transitioning from asset-light to asset-heavy as they invest in GPUs and data centers. Investors may need to reassess how they value these companies, especially given that some are still seeking profitability while heavily dependent on borrowed capital. As the AI market matures, understanding who generates revenue versus who is still in the spending phase will be crucial for navigating potential risks associated with investing in AI. The emphasis on differentiation suggests that not all AI companies are positioned to sustain their current valuations as margins tighten and infrastructure costs rise.