¶ AI Investment Boom and Bubble Concerns
Hello and welcome to Business Daily on the BBC World Service. I'm Will Bain. Today, chip wars, spending like we've never seen before and the battle for supremacy. in artificial intelligence. It feels once again like we're on the cusp of another defining year for global technology and some of the companies and characters who are coming to shape the future.
how we work and interact. So today in the latest of our look ahead to what might be in store for the global economy in 2026, we're talking big tech and the AI arms race.
Yes no companies were perhaps more talked about in 2025 than the largest technology companies in the world whether it was the... money they were spending to get ahead in AI, navigating geopolitical tensions about who could or couldn't buy their products and services, or even having their bosses pitch up at a presidential inauguration.
those companies threaten once again to shape the year ahead, not just for global stock markets, but also for how in particular we work and the sort of jobs we might do in the years to come. So we gathered two of our busiest BBC business correspondents of 2025, our technology editor Zoe Kleinman and our North America technology correspondent Lily Jamali, to look at what 2026 might have in store. for the world's most valuable clutch of companies. So, straw poll.
Between the two of you, how many times have you been asked whether AI is a bubble or not? On air, off air, anywhere. Oh my goodness. Eleventy billion, I think. How about you, Lily? It sounds about right. Well, talk us through it then, Zoe. Why the questions and is there merit to the question, do you think?
Oh, I think there's absolutely merit to the question. I mean, the fact is that we are so often, aren't we, Lily, talking about these eye-watering sums of money that are pouring into these AI companies. I mean, it is astonishing, really, when you look at the numbers of zeros.
announcements and press releases these days. It's another league. And very soon, once you've sort of tried to even get your head around the size of these vast, vast numbers. And let's bear in mind, we're still in a kind of speculative space here. A lot of this technology is in development. It's not like a product that's fully formed and changing the world. That people are making money from. Exactly. It's really interesting to see how much hype and how much value is attached to this.
technology that really is very powerful, but also very much in development at the moment. And I suppose you do still very soon start to think, well, this isn't sustainable, is it? And everyone I talk to says that not all of these companies are going to be worth $11 billion for the rest of time. Right. But what they do say is, you know, if you look down the line in 20 years time, almost all experts predict the world's most powerful and wealthy companies will probably be AI companies.
¶ AI Infrastructure and Industry Deals
And one thing I hear all the time is that the dot-com bubble will make this look like a walk in the park if this bubble... is in fact a bubble and if it bursts because there's so much more money on the line now. Just look at OpenAI, the one that sort of brought AI into the mainstream with ChatGPT. They have entered into deals, massive deals with NVIDIA.
with AMD and Broadcom, which are some of the major chip designers and chip makers. They have these massive deals with Oracle. They're building... tons of data centers. It's all about more chips, more data centers, more power, et cetera, et cetera. And this is a company, OpenAI is, that is now valued at around a half a trillion dollars. That's the most valuable private company out there. So the other thing I think is really interesting here is that...
You might think, oh, it's just the people that invested in OpenAI. I, as a regular person, can't do that. Well, you know, because there's all these publicly traded companies that are now in league with OpenAI, you know, there's a lot of mom and pop investors who...
may be affected by this. And also people who have their retirement funds, perhaps without even knowing it, invested in a company like NVIDIA or Broadcom, for example. I am obsessed with data centers. I've done quite a few stories on them this year. followed them for quite a long time they are i know it's a bit of a weird obsession isn't it but um i i've been to quite a few of them and i've seen them evolve into the sort of ai
focused hubs that they are now. It's really interesting, by the way, that I saw Jensen Huang in London last month, and he was referring to them not as data centres, but as AI factories, which I think is such a neat bit of rebranding.
isn't it? Anyway, when you go to them, it's kind of like being in a supermarket, right? You've just got these massive aisles with these great big servers. I'm quite short. They're way taller than me. And they're gigantic, these places, aren't they? They are huge. When you talk about a factory...
They are bigger and bigger and bigger again. They are like aircraft hangers and they're loud because all of these servers have fans wearing away to try and keep them cool. And you've also got whatever cooling system the data centre is used pumping around as well. So they're loud places anyway.
And then when you get to like the AI bit, it's like you're standing underneath an aircraft. You can literally hear the extra power these computers are using to drive AI because they need the processes and the kit that they're using are just there. that much more energy intensive. It's quite something. It's quite extraordinary. And I think...
We have various stories from around the world about data centres and the impact that they have environmentally and the impact that they have on local communities. The other thing I wanted to say is I think we might be about to go in a different direction with data centres. This is fuelling my obsession. even more. And that's the idea that rather than have these great big aircraft hangers, stadium-sized AI factories,
What about if we just have lots and lots of tiny ones, right? I had dinner with a university professor who told me he's got a GPU, which is one of the processing units, under his desk and he's keeping his feet warm in the winter.
True, that is. I don't know. I've heard stories about people having them in their sheds and things and then selling it off. How do you feel about that? I feel like you should run this idea by Mark Zuckerberg real quick because he is taking on a very different approach. Yeah, well, I mean, what does he know? me frankly.
¶ Global AI Power Struggle and China's Role
Well, as you know, one of his data center complexes is supposed to rival the size of Manhattan in New York City. So I like this notion of small is the new big. I do want to say one trend that I am hearing a lot about here. in Silicon Valley lately is that increasingly companies like that, despite all the bells and whistles with these fancy new agentic AI products, these companies are increasingly turning to Chinese AI technology, which is...
Open source in many cases, unlike what you might see from ChatGPT or Anthropic. ChatGPT, we should say, has recently put out an open source model. but only after a couple of years and probably because they saw what China was doing. You hear people like Brian Chesky over at Airbnb talk about this. I just had a long conversation with the CEO and chief technology officer at Pinterest. There's so many.
other major companies that are using these Chinese large language models. Why? Because they are really cheap, about a tenth of the cost of using something comparable from OpenAI. And they're also...
In some cases, they say better. They're easier to work with. They're much more customizable to the needs of these companies. So I think that's a trend to watch in 2026. One of the unintended, perhaps, consequences of the tariffs and the sanctions that have... been put in between the US and China because it's had to find alternatives and it's had to share much more of its research.
kind of work its way around it, hasn't it? And that is exactly what China has done. And I was in Paris in February for the AI summit. And honestly, it was the most extraordinary meeting because there was this enormous power struggle.
going on between all the different countries. They all want to be the boss, right? They all want to be leading this race. I sat in this room where all of the European leaders were there and in walks J.D. Vance and he delivers this incredible... blistering speech in which he basically says we're in charge we're leading this race we're very happy to work with you but only if you want to play by our rules by the way we're getting really tired of other countries
trying to regulate our tech businesses like butt out. I'm paraphrasing slightly. I can't remember whether he said butt out as such. But anyway, you know, it was absolutely incredible. And everyone in this room, I mean, they were just stony faced. It was like they were at... Absolutely frozen. And I think whatever you think about the way the US is going about this, it was an astonishing display of how to grab hold of something and keep it.
You're listening to Business Daily on the BBC World Service. I'm Will Bain, and today I'm joined by the BBC's technology editor, Zoe Kleinman, and our North America technology correspondent, Lily Jamali, to look ahead at what 2026 might have in store for the world of big tech.
¶ Future Gadgets: Robots and Digital Health
You guys have got your finger on the pulse of all of this kind of stuff. What are you seeing? What are you thinking about, Zoe? What are people chatting to you about that you think, we haven't talked about it much this year, but that is going to be massive next year? I mean, I think robots.
is going to be massive. I have slightly... different opinions about humanoid robots to the tech bros who are obsessed with them I think I've spoken to so many roboticists over the years I will die on this hill probably but they all say first of all robots don't need heads and secondly
Actually, legs are a real pain if you're a roboticist, because if you think about the mechanics and the hardware that goes into making legs, wheels are so much more efficient. They get quite cross about it. So although perhaps the people making the robots are less keen on the human...
form, there is a lot of money and investment and star power going into them. They're certainly a lot less clunky and slow than they have been when I've seen them in the past. I mean, Lily, isn't it a thing that when you go to a tech demo and they show off new gadget? It almost never works. But now actually they do kind of work.
My favorite part, Zoe, is when after the event and it was a failure, the PR people always go, you know, I'm just glad he tried. I really give him a lot of credit for trying. The worst is when the poor old reporter is asked to have a go and then you're... kind of incumbent in its failure too right oh yeah exactly just just make me feel like it's all my fault that it isn't working i've had that a lot of times lily
Yeah, I'm really interested in after the Australia social media ban for people under the age of 16, I should say. I'm really interested in seeing whether more countries. run with that idea and how that will lead into certain technologies. My kids are eight and 10, and I just cannot tell you how many conversations end up in this vein of like...
kits and technology. So I'm really interested in what's happening with what are sometimes called simple phones. I think there is a real push to wean ourselves off of these colorful apps and just the...
¶ Elon Musk and Tech's Content Shift
infinite scroll. A couple of things that we haven't talked about. Someone mentioned Elon Musk. We did better than... Donald Trump getting that far through. He's been a real story this year as well. Why don't someone, Lily, pick up on what next for Elon Musk there as well? And then Zoe, as we end the year, been really interesting. Big tech's kind of continuing moves into content, if you like, spreading it.
wings from its traditional, you know, just doing products or services or making the internet work or data and all that kind of stuff to get into entertainment and movies and things like that as well. Lily, why don't you give us a bit of a thought on Musk quickly? Yeah, I mean, just a spectacular falling out between these two men, Elon Musk and Donald Trump, after Elon Musk contributed.
I want to say in the neighborhood of $300 million to help Donald Trump get elected, was out on the campaign trail for him. And, you know, they had that big stumble and it was pretty wild to watch. I am noticing Elon Musk is... a little bit less political now. He just on a recent podcast said he's very much focusing on his business and people who are invested in companies like Tesla, that's exactly what they have been wanting for quite some time. I can't tell you how many times.
someone on the phone has said, I just want him to get back to running the businesses. And he runs a number of businesses. So that's something to watch in 2026. I think when you have two major personalities like that, of course, you're going to. get a clash eventually and it was sort of just.
a time bomb. I was going to say that. I mean, who on earth could have predicted that these two enormous egos would eventually end up trying to destroy each other? Gosh, what a surprise. That would have been one of our bets. If we'd made these predictions this time last year, surely we would have got...
hit on that one if we hit on nothing else as well zoe on the content side of things is that that they're just trying to find other revenue streams is it because they think it's sexy and an exciting thing to bet into why do they want to be in that space
I think it's probably all of the above. I mean, it can be lucrative depending on what kind of content you're doing. It's certainly not new. We've had Apple go into Apple TV. We've got Amazon doing music and video and also hoovering up sports rights we're seeing.
the streaming companies doing that to sort of very much muscling in on traditional broadcasting. And of course, what they have to their advantage is an enormous amount of money. So they can throw a lot of money at this. They can invest in high quality production. They can invest in big sporting.
events that charge a lot of money to be broadcast and they've got the resources to do it. Give us a very last quick thought then both, something that we're not talking about now that you think you'll talk about lots next year. I feel like Jensen Wang has...
¶ Smart Glasses: Next Smartphone Frontier
This is the chief executive of NVIDIA. Jensen Wang, exactly. The chief executive of the chip designer NVIDIA, the most valuable publicly traded company in the world. first to reach $4 trillion in value. A lot of the oxygen was sucked up by Elon Musk this year in terms of our attention. But Jensen Wang is, I call him Silicon Valley's diplomat in chief because...
He has a different personality than Elon Musk. He has managed to, it seems, endear himself to Donald Trump in a way that Elon Musk ultimately... Wasn't able to. And he is the diplomat on behalf of all tech companies, but certainly on behalf of his own company as well, trying to. Make sure that NVIDIA chips can be sold everywhere. And I know Zoe has gotten to interact with him somewhat.
I did. I met him at a party at a palace in London. A sentence I never thought I would say, but I had a good chat with him. I am going to go with glasses. Oh, yeah. A couple of years ago. I was very fortunate to be one of the first people in the world to try out Apple's Vision Pro headset before it came out. And I had to go to Cupertino and it was all very secret squirrel. I tried it on and the demo.
that I had was like weirdly underwhelming. You know, I was like looking at my photos, but obviously they were beautiful, big photos. And I was messaging my mum in this really kind of weird... cool space and, you know, doing... Everyday things. All of the VR demos I've ever had have been, you know, I've climbed the first base of Everest in VR. I've piloted spacecraft. I've walked with dinosaurs. You know, I've played in rock stadiums. Like, what am I doing?
messaging my mum, right? Why have I come all this way to do that? And then I kind of realised that I've gone out there thinking, what is Apple doing? How does this fit with what they already have in terms of their hardware? You know, they've got it pretty much sewn up.
But I came to the conclusion that what I had on my head was the beginnings of the replacement of the smartphone. I do think that it's going to end up being a pair of glasses. We've got Google working on one, haven't we? Meta's glasses have been out for a while. I do think there's a bit of a race going on and I wonder whether what we'll see is a sudden explosion of them. I like that prediction. What I saw in Menlo Park just a couple of months ago at Meta headquarters with their new Ray-Bans.
that have this sort of handset that you can, just with small movements, do things on your glasses. See messages, send messages. It's pretty remarkable. And you kind of have to see it and touch it and feel it. and experience it to believe it. But I think you're definitely onto something with that, Zoe. It could be the new form factor, Silicon Valley's favorite term.
Right, time for us to all head off to a palace, or a palace a bit like it. Thank you both. Thank you. That was the BBC's technology editor, Zoe Kleinman. And Lily Jamali, our North America technology correspondent, speaking to us from Silicon Valley. They're not just about the big kind of political trends and business trends, I suppose, that might shape big tech, but the products that we may be getting our hands.
or our heads by the sound of things around in 2026 as well. They bring us to the close of our series of look-aheads to the big business and economic trends. For the year ahead, that series has been produced by Matt Lyons. And remember, if you've missed one of them, scroll back through our podcast. Indeed, subscribe to Business Daily wherever you get yours from to never miss an episode.