Signal/Noise

Signal/Noise 2026-01-01 The AI industry enters 2026 facing a fundamental reckoning: the easy money phase is over, and what emerges next will separate genuine technological progress from elaborate venture theater. Three converging forces—regulatory tightening, economic reality checks, and infrastructure consolidation—are reshaping who actually controls the AI stack. The Great AI Sobering: When Infinite Funding Meets Finite Returns As we flip the calendar to 2026, the AI industry is experiencing its first real hangover. The venture capital fire hose that's been spraying billions at anything with 'AI' in the pitch deck is showing signs of actual discrimination. This isn't about a funding winter—it's about VCs finally asking the uncomfortable question they've avoided for two years: 'Where's the actual revenue?' The tell isn't in the headline funding numbers, which remain inflated by a few mega-rounds. It's in the increasingly specific demands for unit economics, customer retention metrics, and—gasp—actual moats beyond 'we have really smart engineers.' Companies that...