2026: The Resurgence of Consumer Tech in the AI Era
Since 2022, the consumer technology sector has faced a downturn, with venture capitalists (VCs) becoming cautious due to economic uncertainties and inflation concerns. This caution led to a significant shift in AI investments towards enterprise solutions, which offered substantial contracts and rapid scalability. However, Vanessa Larco, a partner at the venture firm Premise and former partner at NEA, anticipates a revival in consumer tech for 2026.
In a recent episode of the Equity podcast, Larco expressed her optimism, stating, This is gonna be the year of the consumer. She highlighted that while enterprises possess large budgets and a pressing need to integrate AI solutions, they often face challenges in adoption due to uncertainty about where to begin. In contrast, consumers and prosumers have clear intentions for AI applications, leading to quicker adoption and sustained usage if the product meets their needs.
Larco emphasized the advantage for startups developing AI products for consumers, noting that they can rapidly assess product-market fit based on user engagement and feedback. This immediacy allows for swift pivots or enhancements, ensuring the product aligns with consumer demands.
The current economic climate underscores the importance of consumer tech products that can scale effectively, as they demonstrate a robust product-market fit. Recent developments indicate a resurgence in consumer tech. For instance, OpenAI’s integration of apps like Target, Zillow, Expedia, and Spotify into ChatGPT enables users to perform various tasks seamlessly through the chatbot interface.
Larco envisions AI evolving into concierge-like services that cater to user needs efficiently. She poses a critical question: which services should be specialized, and which should remain general-purpose? As OpenAI positions ChatGPT as a central platform for consumer internet activities, the fate of legacy companies like Tripadvisor or WebMD remains uncertain. Will they continue as standalone entities, or will they be integrated into platforms like ChatGPT?
While Larco anticipates a surge in mergers and acquisitions in 2026, she is particularly interested in investing in startups that are unlikely to be overshadowed by giants like OpenAI. She points out that OpenAI doesn’t manage tangible assets, suggesting they might not venture into areas requiring physical management, such as competing directly with Airbnb. This perspective opens opportunities for startups to fill these specific niches.
Another consideration is the potential monetization strategies of platforms like OpenAI. If they decide to take a significant cut of the traffic they direct to other services, companies like Airbnb might reconsider their collaboration terms. Larco predicts that new monetization strategies and business models will emerge from the evolving consumer experience online.
The proliferation of AI-generated content on social media platforms has led to challenges in discerning authentic information. Larco recounts an experience where she sought news on Instagram about a political event but was inundated with AI-generated content. This saturation raises concerns about the reliability of information on platforms like Meta and TikTok. As a result, there is a growing need for platforms that can verify and provide genuine content, potentially leading to a shift in how users consume news and entertainment.
The acquisition of AI agent startup Manus by Meta has sparked discussions about enhancing products like Meta’s Ray-Ban smart glasses. Larco, a proponent of these smart glasses, appreciates their ability to perform tasks like answering calls, responding to messages, capturing media, and interacting with Meta AI without relying on a screen. She believes that voice AI assistants are on the brink of becoming truly useful, thanks to advancements in technology and computing power.
Larco advocates for a thoughtful approach to integrating voice and screen interfaces, suggesting that designers should determine which tasks are better suited for voice commands and which require visual interaction. This perspective encourages a reimagining of product design to enhance user experience by leveraging the strengths of both voice and screen interfaces.
