"Elon Musk's xAI rang in the new year by raising $20 billion in its latest funding round. Undoubtedly, as the AI race intensifies and the use cases of the technology become more apparent (Claude Code and its Cowork agent seem to have sparked a panic in software), perhaps we'll begin to hear a bit less about an AI bubble, even as the frontier AI innovators look to continue spending considerable sums on infrastructure."
"As volatile as 2026 has been so far, I still think it could be a disruptive year for the tech sector as the performance gap between the haves (AI innovators) and the have-nots (some lagging software firms) looks to become just a bit wider. Undoubtedly, the year may have just begun, but we've seen some spectacular moves within the tech scene."
Elon Musk's xAI secured $20 billion in new funding, boosting infrastructure spending among leading AI firms. Claude Code and its Cowork agent produced sharp market reactions within software. Investor sentiment about an AI bubble eased as breakthrough use cases emerged. Early 2026 showed elevated volatility and a widening performance gap between AI innovators and some lagging software firms. Alphabet continued to rise while several software names declined sharply. Major AI-related IPOs, including potential listings from xAI, Anthropic, and OpenAI, are increasingly possible if valuations in big AI firms continue to grow.
Read at 24/7 Wall St.
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