While venture capital investment in consumer tech has seen a downturn since 2022, largely due to a turbulent macroeconomic climate and cautious consumer spending, one prominent venture capitalist is making a bold prediction: 2026 will be "the year of the consumer" for artificial intelligence (AI).
Vanessa Larco, a partner at Premise VC and former partner at NEA, shared her insights on the Equity podcast, noting a significant shift from the current enterprise-focused AI investment trend. For the past few years, most AI capital has chased enterprise clients, drawn by the promise of substantial contracts and clear paths to scalability.
Why Consumer AI is Poised for a Comeback
Larco argues that despite enterprises having large budgets and an eagerness to implement AI solutions, adoption often stalls because "they don’t know where to start." In contrast, the consumer and "prosumer" markets offer a more direct path to product-market fit.
“The fun thing about consumer and prosumer…is that people already have in mind what they want to use it for,” Larco explained. “And so they purchase it, and if it meets the need, they just keep using it.”
This rapid feedback loop means startups building AI products for consumers can quickly ascertain if their solution genuinely meets a need, rather than merely securing a contract. In an uncertain economy, consumer tech products that achieve scale are a strong indicator of robust product-market fit.
Early signs of this consumer tech resurgence are already visible. Late last year, OpenAI integrated various apps into ChatGPT, enabling users to perform tasks like shopping with Target, exploring real estate with Zillow, booking travel with Expedia, or creating Spotify playlists directly through the chatbot.
“AI is gonna feel like concierge-like services, which will do everything for you that you have in mind,” Larco stated, posing the critical question: “Which of it should be specialized, and which should be general purpose?”
As OpenAI positions ChatGPT as a potential new operating system for the consumer internet, a key challenge emerges: which legacy companies, such as Tripadvisor or WebMD, will maintain their independent relevance, and which will be absorbed or overshadowed by OpenAI's expanding ecosystem?
Investing in the OpenAI-Proof Future
While Larco anticipates 2026 to be a "gangbuster" year for mergers and acquisitions, her investment focus is on startups that "OpenAI isn’t going to want to kill." She believes OpenAI will not venture into areas requiring the management of real-world assets or human-centric marketplaces.
“OpenAI doesn’t manage real-world assets,” she clarified. “I don’t think they’ll build an Airbnb competitor because I don’t think they’re gonna want to manage homes…I don’t think they’re going to build any of these marketplaces that require real humans because they don’t want to manage the humans.”
Larco is also closely monitoring the potential for OpenAI to implement an "Apple or Android-like" model, taking a significant cut (e.g., 30%) of traffic it directs to other services. Such a move would force existing platforms like Airbnb to reconsider their engagement strategies.
Overall, Larco predicts that this evolving online consumer experience will give rise to novel monetization strategies and fresh business models.
Social Media Must Evolve
Larco also highlighted a critical issue facing social media platforms: the proliferation of AI-generated content. She recounted an experience on Instagram while seeking news on a major political event, only to be "overwhelmingly flooded with AI-generated Maduro slop." This incident underscored how AI-generated content is increasingly muddying the waters of truth in major news cycles.
“At that point, I was like, if I’m just gonna be watching AI-generated videos and photos, I want it to be funny,” she remarked.
Larco, like many others, now assumes much of the realistic-looking content on platforms like Meta and TikTok is AI-generated. This raises a fundamental question: where will users find reliable, human-verified content? While platforms like Reddit and Digg are reportedly tightening verification to exclude AI bots, Larco suggests Meta might transform into an entertainment-focused company, a platform primarily for user-generated short films.
“I think we should move on from getting your news from [Meta],” Larco advised. “You are just getting funny videos from there. It’s not social media. It’s just gaming and entertainment media.”
The Power of Voice: Beyond the Screen
Meta’s recent acquisition of AI agent startup Manus, though perceived by many as an enterprise play, could also significantly enhance its Ray-Ban smart glasses. Larco is a strong proponent of these glasses, appreciating their ability to manage calls, messages, photos, videos, and Meta AI queries without requiring a phone screen.
Larco believes truly useful voice AI assistants are "on the cusp of happening," driven by technological advancements and more robust computing power. She advocates for a re-evaluation of how we interact with technology.
“Some things are better with voice than a screen,” she stated. “And because voice sucked, we needed the screen as a crutch. But I would love to start separating out what things are really better on a screen and what things are just better with audio.”
For instance, quickly answering a child’s question about the tallest building feels "archaic" when done by typing on a phone, but natural with voice. This shift, Larco notes, will offer exciting opportunities for designers to optimize form factors for specific use cases, moving beyond a default screen-centric approach.
