The 2026 risk debate reflects a broader economic philosophy, with “you win, I lose” global equity flows connected to AI-bubble risks and the U.S. dollar. The consensus view of a the U.S. soft-landing favors a win-win environment, where strong corporate earnings create a positive-sum outcome, allowing various sectors to thrive together and helping the rest of the world, too.
Proponents of this view see opportunities beyond tech giants, arguing that collaboration and a long-term focus can benefit everyone. But fears of an AI crash and renewed U.S.–China trade conflict highlight downside risks, where a “conflict or trade” choice could disrupt global markets. Political zero-sum debates also loom, with U.S. partisanship and key elections for Brazil and beyond reshaping how investors view long-term growth. Renegotiation of the U.S.–Mexico–Canada Agreement (USMCA) may prove pivotal in settling trade and investment direction.
The bearish case for equities starts with stretched technology valuations and turns to which alternatives can manage the rotation. iFlow shows 65% of equity exposure in the U.S. markets and under 1% in China. Markets want a win-win scenario that includes Financials, Industrials and Consumer Staples, but each requires its own economic and policy setups. The outcome will rest on FOMC rates, U.S. midterm elections and global policy tweaks.
Digging into the AI risks continues to be the main exercise for equities into 2026.
AI and the temporal problem. Time remains a uniquely human concept, which is why many argue AI remains far from artificial general intelligence (AGI) – the kind that can think and adapt like a human. In theory, a system with vast knowledge should be able to interpret time through a historical lens, identify patterns and apply them to current conditions. But modern markets reward deep specialization over generalist knowledge, creating silos where micro-level narratives can unexpectedly drive macro outcomes. As a result, AI must evolve in how it compares disparate information sets. At the same time, there is a risk that marketing-fueled investment may be oversupplying data centers and chip capacity, echoing the excesses of the late-1990s dot-com bubble.
Data centers and energy. The biggest IPO in 2026 will be SpaceX, with valuation estimates ranging from $1tn to $1.5tn. The company is challenging the communications industry, from AT&T and Verizon to Charter Communications and Comcast. The biggest surprise of the IPO is its longer-term goal to put data centers into space. Solar power and space cooling could offset the cost of putting centers into orbit. There is also a security benefit, as Earth-related disasters are ongoing and costly.
LLM battles and winner-take-all thinking. OpenAI is set to launch the second-largest IPO of 2026, estimated at $1tn. The risk of another China DeepSeek moment seems high heading into this event. In the same vein, the battle between OpenAI, Google, Anthropic and others is wide open, with winner-take-all concerns rising as large-language models (LLMs) link to consumer and corporate demand. The interlinked ecosystem matters: Microsoft owns 27% of OpenAI, which is also one of Nvidia’s largest customers. Oracle and CoreWeave’s AI data center buildouts add to circularity concerns, as OpenAI has committed $1.4tn to future expansion, financed through blended investment and commercial agreements.
