According to Sifted, in a podcast discussion between editors Amy Lewin and Martin Coulter, the central question for the European tech scene in 2026 is whether the artificial intelligence investment bubble will finally burst. They explore which emerging sectors are likely to attract heavy venture capital funding this year and what the future holds for “sovereign” tech startups, which focus on regional technological independence. The conversation also speculates on which European tech billionaire might make a run for political office, potentially as president. They conclude by forecasting key developments within the venture capital industry itself, framing 2026 as a pivotal year for the ecosystem.
The AI Bubble Reality Check
Here’s the thing: calling for a bubble to burst is almost a cliché in tech journalism. But sometimes, it’s warranted. The Sifted team pointing to 2026 feels significant. That’s not tomorrow, but it’s not far off either. It suggests they’re seeing a disconnect between today’s sky-high valuations and the tangible, profitable applications that will need to materialize soon. I think the real question isn’t *if* there’s a bubble, but *what part* of it pops. Will it be the me-too foundational model companies that burned a billion dollars on compute? Or the endless parade of “AI-powered” features slapped onto existing SaaS products? The hype cycle has to give way to a value cycle eventually. And 2026 sounds about right for that reckoning.
Sovereign Tech and Political Ambitions
Now, the parts about “sovereign” tech and a tech billionaire running for president are fascinating. They’re deeply intertwined. Geopolitical tensions are absolutely throwing spanners in the works, and that’s creating a massive opportunity. Startups focusing on regional cloud infrastructure, cybersecurity, space tech, and semiconductors are going to get a lot of love from governments and VCs alike. It’s a defensive play. And what better way to cement that influence than by moving from the boardroom to the political arena? We’ve seen the playbook in the US. Is it so hard to imagine a figure from, say, the fintech or telecom world in Europe making a similar pivot? The lines between tech sovereignty and political power are blurring fast.
The VC Industry’s Own Woes
Let’s not forget the VC industry itself is under pressure. They’re the ones who inflated the bubble, and they’ll feel the pinch if it bursts. We’re already seeing a flight to quality and a brutal environment for raising new funds. If 2026 is the year the music stops for AI, it’ll also be the year VCs have to answer some hard questions. How many of their portfolio companies are actually generating revenue, not just buzz? How many are reliant on the next, even larger funding round to survive? The conversation on Sifted hints at this introspection. It’s easy to be optimistic when markets are rising. The true test of the European ecosystem’s resilience will be how it handles a downturn.
So, is the prediction right? Maybe. Timing these things is notoriously hard. But the underlying message is solid: the era of easy money for anything labeled “AI” is closing. The next phase will demand real products, real customers, and real paths to profitability. And that’s probably a healthy thing for everyone in the long run, even if it’s painful in the moment. You can listen to the full discussion on Apple Podcasts, Spotify, or elsewhere.
