Jeffrey Katzenberg, the former DreamWorks CEO turned venture capitalist, predicts that 2026 will be a pivotal year for the AI industry, separating companies delivering real results from those that aren’t. Speaking on the “Sourcery” podcast released Monday, Katzenberg dismissed concerns about an AI bubble burst, instead forecasting a “reckoning” that will distinguish genuinely effective AI deployments from hype.
Katzenberg’s distinguished career spans a decade as chairman of Walt Disney Studios until 1994, followed by cofounding DreamWorks, where he oversaw blockbuster franchises including “Shrek,” “Madagascar,” and “Kung Fu Panda.” After stepping down in 2016, he cofounded WndrCo, a venture capital firm with former Dropbox CFO Sujay Jaswa in 2017. The firm has invested in prominent AI companies including Cursor, Harvey, and Figma.
Crucially, Katzenberg emphasized that the AI landscape won’t be a “zero-sum game” or “winner-take-all” scenario, though he acknowledged that “not everybody is going to win at this.” This perspective offers a nuanced view of the competitive AI market, suggesting multiple companies can succeed simultaneously while some will inevitably fail.
WndrCo’s investment philosophy focuses on human ingenuity rather than traditional metrics. General partner ChenLi Wang explained their approach: “The ingenuity and creativity of people and how magical their spikes are, and how, when you complement people and what they can create together, is the secret sauce.” Notably, Wang and Katzenberg reject evaluating talent based on benchmarks, drawing parallels to parental complaints about standardized testing “dumbing down” children.
This criticism of AI benchmarks aligns with broader industry concerns. Dean Valentine, cofounder and CEO of AI security startup ZeroPath, wrote in a March blog post that “recent AI model progress feels mostly like bullshit.” His team evaluated models claiming improvements since Anthropic’s 3.5 Sonnet release in June 2024, finding none made “significant difference” in their internal benchmarks or developers’ bug-finding abilities.
Research from the European Commission’s Joint Research Center reinforced these concerns in a February paper titled “Can we trust AI Benchmarks?” The researchers identified major issues in current evaluation approaches, noting that benchmarks “often prioritize state-of-the-art performance at the expense of broader societal concerns.” This growing skepticism about AI performance metrics suggests the industry may need to fundamentally rethink how it measures progress and success.
Key Quotes
Rather than look at it from the sort of extreme notion of what that means for a bubble to burst, I think there’ll be a reckoning here in which those that actually are producing real results and are being deployed in really effective and efficient ways.
Jeffrey Katzenberg, former DreamWorks CEO and WndrCo cofounder, explained his view on the AI industry’s future when asked about potential bubble concerns. This statement reframes the bubble debate as a quality-driven market correction rather than a catastrophic collapse.
It’s not going to be a zero-sum game, a winner-take-all. But I also think at the same time, not everybody is going to win at this.
Katzenberg offered this nuanced perspective on AI market competition, suggesting room for multiple successful companies while acknowledging inevitable failures. This challenges the common narrative of AI being dominated by a single winner.
The ingenuity and creativity of people and how magical their spikes are, and how, when you complement people and what they can create together, is the secret sauce.
ChenLi Wang, WndrCo’s general partner, described the firm’s investment philosophy that prioritizes human creativity over standardized metrics. This approach reflects growing skepticism about traditional AI evaluation methods.
Recent AI model progress feels mostly like bullshit.
Dean Valentine, cofounder and CEO of AI security startup ZeroPath, bluntly criticized AI advancement claims in a March blog post. His team’s testing found no significant improvements in models released after Anthropic’s 3.5 Sonnet, highlighting the gap between marketing claims and actual performance.
Our Take
Katzenberg’s intervention is particularly significant given his track record of identifying transformative entertainment technologies and his current position as an active AI investor. His 2026 timeline for a market reckoning suggests sophisticated investors are already preparing for consolidation, which could accelerate the timeline for AI companies to demonstrate ROI. The convergence of criticism about AI benchmarks from investors, startups, and European researchers indicates a systemic problem that could reshape the entire industry’s evaluation framework. This matters because if current metrics are unreliable, we may be misallocating billions in investment capital. The emphasis on human creativity and complementary skills over raw benchmark performance suggests the next wave of successful AI companies will be those that augment rather than replace human capabilities. Businesses should focus on practical deployment outcomes rather than impressive-sounding benchmark scores when evaluating AI solutions.
Why This Matters
This story signals a critical maturation phase for the AI industry as it transitions from hype-driven investment to results-focused evaluation. Katzenberg’s prediction of a 2026 reckoning suggests investors and stakeholders are preparing for a shakeout that will separate substantive AI companies from those riding the hype wave. His “not winner-take-all” perspective is particularly significant, challenging the narrative that AI will be dominated by a single player and offering hope for diverse competitors.
The criticism of AI benchmarks from both investors and researchers reveals a fundamental problem in how the industry measures progress. If leading VCs like WndrCo and security startups like ZeroPath can’t trust current evaluation methods, this undermines confidence in AI advancement claims and could reshape how companies demonstrate value. The European Commission’s findings that benchmarks prioritize performance over societal concerns highlights the gap between technical achievements and real-world impact. For businesses considering AI investments, this suggests the need for deeper due diligence beyond headline metrics, while for AI companies, it signals that demonstrating tangible outcomes will become increasingly critical for survival and funding.
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Source: https://www.businessinsider.com/hollywood-vc-jeff-katzenberg-ai-wont-be-zero-sum-game-2025-12