I concluded my post “Magic and Mayhem” with a bit of a tease about the impact of AI on our society:
There will be lots of magic this year. But there will also be plenty of carnage as previously unbreachable moats start to crumble, not only in business, but also in society at large. For more on that, stay tuned for prediction #2.
Well, here we are, at the penultimate prediction, which I’ll sum up in this way: 2026 will be the year that AI becomes a proxy for escalating social conflict, across many connecting but distinct sectors, including politics, business, culture/arts, health, and education.
Up till now we’ve seen running gun fights around AI in each of these categories. While they have sometime grown serious (chatbots talking vulnerable individuals into suicide, publishers and artists suing AI companies, state legislators clashing with the White House over legislation), they’ve not risen to the level of societal crisis. That will change in 2026, as the stakes grow too high to be ignored by politicians, media figures, business leaders and citizens alike.
Driving this tipping point is the concentration of capital and power in the tech industry, creating an asymmetrical economy that will leave far too many people on the sidelines. As Tim O’Reilly noted in a must read piece last week:
You can’t replace wages with cheap inference and expect the consumer economy to hum along unchanged. If the wage share falls fast enough, the economy may become less stable. Social conflict rises. Politics turns punitive. Investment in long-term complements collapses. And the whole system starts behaving like a fragile rent-extraction machine rather than a durable engine of prosperity.
AI has already become politicized, both culturally (look no further than what Musk is doing with Grok), as well as economically (AI has driven a rare piece of bi-partisan economic policy from the usually fractious US Senate). But given that we’ll have consequential mid-term elections this year, I expect AI will become a stand in for all manner of political convictions, many of which will be unrecognizable when compared to traditional orthodoxies.
The libertarian feudalist wing of the Big Tech party* will spend heavily to ensure their voices remain the loudest in Washington, but populism loves a villain, and all year long the tech lords be painted as villains by a rag tag coalition of local politicians, disenchanted business owners, and increasingly angry labor, media and education leaders. Ideological battle lines will be drawn – you’re either in favor of the glorious future that AI promises, or you’re fighting the plutocrats seeking to cement their power through mechanisms of surveillance capitalism.
Those battles will spill out into the streets, fueled by economic hardship, a prevailing sense of institutional injustice, and the actions of an increasingly unhinged administration. As O’Reilly notes:
We may be building the engines of extraordinary productivity, but we are not yet building the social machinery that will make that productivity broadly usable and broadly beneficial. We are just hoping that they somehow evolve.
In 2026, that evolution will be messy, ungoverned, and seemingly incomprehensible. But at its core lies an existential question: What happens to us when we build machines capable of fabricating reality, seemingly rendering us obsolete in the process? For more on THAT question, stay tuned for prediction #1.
*IE, the tech bro coalition of Musk, Andreessen, Thiel, Karp, Vance et al.
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This is the eighth in a series of post I’ll be doing on predictions for 2026. The first seven are here, here, here, here, here, here and here. When I get to #1, I’ll post a roundup like I usually do.
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