Where Is AI Business Moving in 2026?

TL;DR

AI business opportunities are expanding, with a shift towards clearer ROI expectations and a full-service transformation partner model. High-converting AI audits and education will play crucial roles, while general software development becomes more significant. The rise of forward-deployed engineers and AI executive assistants are notable trends, and intellectual property is becoming the ultimate goal for agencies.

Transcript

While everyone's screaming about the AI bubble popping, at Morningside AI, we are seeing the exact opposite. My team worked with NBA teams and Fortune 500 companies every day. And what we're seeing has me more excited about TW26 than ever before. The AI agency opportunity isn't shrinking. It's actually evolving and is getting a lot bigger for those... Read More

Key Insights

• Clients in 2026 will demand clearer ROI from AI projects due to high failure rates in past custom development projects.
• AI agencies are evolving from automation providers to full-service transformation partners, offering education, consulting, and development.
• AI audits are becoming a popular and effective way to start client relationships, leading to long-term partnerships.
• Education and training are crucial for AI adoption, ensuring employees can effectively use new AI tools and systems.
• General software development is gaining importance as businesses need foundational tools before implementing AI solutions.
• Forward-deployed engineers, who combine consulting and technical skills, are in high demand for AI transformation projects.
• Agencies are turning service work into valuable intellectual property, aiming to create scalable software solutions.
• Building strong, long-term partnerships with mid-market clients is becoming a strategic focus for AI agencies.

Questions & Answers

Q: How will AI business opportunities change in 2026?

In 2026, AI business opportunities will expand significantly, with a focus on delivering clear ROI and evolving into full-service transformation partners. Agencies will need to offer comprehensive services, including consulting, education, and development, to meet the growing demand for effective AI solutions. This shift aims to address past skepticism and improve the success rate of AI projects.

Q: What is the role of AI audits in client relationships?

AI audits are becoming a crucial entry point for establishing client relationships in 2026. They offer a practical way to assess and identify opportunities for AI integration, leading to larger development deals and long-term partnerships. By providing valuable insights into a business's current processes, AI audits help agencies demonstrate their expertise and build trust with potential clients.

Q: Why is education important for AI adoption?

Education is vital for AI adoption as it ensures employees can effectively use new AI tools and systems. Without proper training, the value of AI solutions is diminished, as employees may struggle to integrate them into their workflows. Agencies must offer education and training as part of their services to ensure successful adoption and maximize the impact of AI implementations.

Q: How is general software development impacting AI agencies?

General software development is becoming increasingly important for AI agencies as businesses recognize the need for robust foundational systems before implementing AI solutions. This shift allows agencies to offer a broader range of services, enhancing their value proposition and enabling them to command higher fees. By focusing on software development, agencies can address clients' immediate needs and pave the way for future AI integration.

Q: What is the significance of forward-deployed engineers?

Forward-deployed engineers are becoming crucial in the AI transformation space. These professionals combine consulting and technical skills, enabling them to conduct in-person audits, understand business problems, and develop solutions on-site. Their ability to bridge the gap between consulting and development makes them highly valuable, as they can quickly demonstrate the potential impact of AI solutions to clients.

Q: How are agencies turning service work into intellectual property?

Agencies are increasingly focusing on turning service work into valuable intellectual property by developing scalable software solutions. By owning the IP for solutions created during client projects, agencies can leverage these assets to create standalone products or SaaS offerings. This approach allows agencies to diversify their revenue streams and build long-term value beyond traditional service-based business models.

Q: What is the partner race in AI agencies?

The partner race refers to the strategic focus of AI agencies on building strong, long-term relationships with mid-market clients. By becoming a trusted AI transformation partner, agencies can secure ongoing business and avoid the constant need to acquire new clients. This approach emphasizes the importance of in-person interactions, relationship-building, and a deep understanding of clients' business needs.

Q: What trends are influencing AI development in 2026?

In 2026, AI development will be influenced by trends such as the rise of forward-deployed engineers, the importance of education and training, and the shift towards general software development. Agencies will focus on providing clear ROI, developing scalable intellectual property, and building strong client partnerships. These trends aim to enhance the effectiveness of AI solutions and address past challenges in AI adoption.

Summary & Key Takeaways

• AI business in 2026 will focus on providing clear ROI, as clients demand more transparent outcomes from AI projects. Agencies will shift towards being full-service transformation partners, offering a comprehensive range of services including education and consulting. This holistic approach aims to address skepticism and improve the success rate of AI implementations.

• AI audits are emerging as a key entry point for establishing client relationships, offering a practical way to assess and identify opportunities for AI integration. As these audits gain popularity, they are becoming a lucrative service for agencies, often leading to larger development deals and long-term partnerships.

• General software development is becoming increasingly important as businesses recognize the need for robust foundational systems before adding AI capabilities. This shift allows agencies to offer a broader range of services, enhancing their value proposition and enabling them to command higher fees for both software and AI development.