Please find Sapphire Ventures’ latest Market Memo: 2026 Midyear Review (Part 2) here. In the second installment of our Midyear Review, we explore the remaining five questions shaping today’s AI landscape, from where AI is already delivering measurable enterprise value to the competitive battles emerging across the AI stack. We also examine the economics of enterprise AI adoption, where the next wave of breakthroughs may come from, and the key risks that could influence the pace of adoption in the years ahead.

Here’s a preview:

• AI is moving beyond experimentation: We highlight the categories where AI is already creating meaningful enterprise value, led by coding, inference platforms, vertical AI, and customer support.
• Competition is intensifying: Frontier labs, open-weight models, hyperscalers, incumbents, and AI-native startups are competing across every layer of the AI stack.
• The focus is shifting to ROI: As AI spending accelerates, enterprises are prioritizing efficiency, model economics, and long-term optimization strategies.
• Innovation continues at a rapid pace: We discuss the emerging technologies, from long-horizon autonomy to Physical AI and World Models, that could define the next generation of AI capabilities.
• Adoption won’t be linear: Security, regulation, infrastructure investment, and economic uncertainty all remain important factors that could shape AI’s trajectory.