Good morning from OWITH.ai: the podcast that gives you only what's important to hear in the AI and tech world.The year 2026 is anticipated to bring both opportunities and challenges to the venture capital and private equity sectors. Artificial Intelligence is expected to significantly influence these industries, acting as a force multiplier. However, its impact will differ across the board, leading to potential losses during phases of consolidation. While liquidity is returning with increased market velocity, fragility also looms large. A noticeable trend is the concentration of capital at large firms, which could pose risks to mid-sized entities unless they find ways to differentiate and scale effectively.In private equity, deal-making is expected to accelerate, with an emphasis on capital return through M&A activities, IPOs, and continuation vehicles due to previous capital deployment surpassing distributions. With transaction volumes projected to rise by around 20% compared to the previous year, declining interest rates are likely to enhance liquidity and reduce capital costs. Despite macroeconomic uncertainties, sectors with defensive demand might attract more capital. Returns are anticipated to be driven by execution and operational efficiency rather than multiple expansion.In venture capital, mutual funds launched by large firms could be a significant development amid easing 401(k) regulations. Capital continues to consolidate around mega-funds and niche specialists, posing a threat to generalist firms lacking a distinct edge. Fundraising remains challenging for emerging managers as the LP base consolidates around larger institutional backers. Family offices and sovereign wealth funds might increasingly fill gaps left by traditional venture structures.Transitioning smoothly into startups, AI startups are reaching a saturation point with many tackling similar ideas, leading to price wars and thin margins. However, overlooked categories present real potential. Founders are encouraged to focus on disciplined leadership and fundamental strengths amidst market resets. A shift towards super-intelligent AI startups is expected, with trends indicating rapid revenue growth from zero to one hundred million dollars and potentially accelerating towards a one billion dollar club as AI adoption rises.Moving on to early January 2026 developments in tech, Meta has delayed the international rollout of its Ray-Ban display smart glasses due to inventory shortages and high demand in the U.S., initially planned for release in other countries like Canada and Italy. Meanwhile, xAI raised twenty billion dollars as part of an escalating funding race among AI startups, highlighting concerns about a potential AI bubble as xAI focuses on developing AI supercomputers.Elsewhere, Chinese officials are reviewing Meta's two billion dollar acquisition of the AI startup Manus for possible export control violations amid ongoing geopolitical battles between China and the U.S. for AI dominance. This acquisition is part of broader market-shaping activities, including Nvidia's licensing deal with Groq.In another transition, Amazon faces issues with its AI-powered shopping tool, while Accenture acquired British AI startup Faculty, highlighting strategic moves in the industry. Notable acquisitions include Mobileye purchasing Israeli humanoid robot startup Mentee Robotics for nine hundred million dollars.Turning our attention to geopolitical impacts reported in Fortune's CEO Daily newsletter: Donald Trump's aggressive foreign policy actions are making waves internationally. His "Donroe Doctrine," a rebranding of the Monroe Doctrine, aims at asserting U.S. dominance over r

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