We are already seeing AI companies simultaneously acting as investors, customers, suppliers, and counterparties to each other. That creates the impression of enormous liquidity and momentum, but it also creates circularity. The capital is real, but the ecosystem resembles its own self-supporting loop.
More striking still has been the informational cannibalisation underway. AI models are increasingly training on AIgenerated content, introducing distortions that would have been unthinkable – or deliberate- in academic or professional publishing ten years ago. The“ hallucination” problem- once framed as a quirk- now has serious implications for trust. When an AI system invents a concept, has it created a new idea, or a new form of error? And what happens when that invented concept is then cited, published, and re-assimilated as if it were legitimate?
At the darker end of AI, we are seeing genuine social harm from falsified reports to manipulated imagery and aggressive misinformation. The Musk-Grok axis in the US has shown how rapidly AI can become a partisan force rather than a neutral technology.
The point is not that AI is a bubble destined to burst. There is real commercial utility and genuine progress being made. But the bigger question is whether 2026 becomes the year where the world begins to regulate, censor, distrust, or simply tire of AI in its current form. becoming harder to ignore.
The question for 2026 is not which fuse will ignite, but when one of them will.
Despite all of this, there are meaningful positives. Corporate profitability is strong across much of the developed world, capital expenditure remains elevated, and investors remain willing to fund growth. Even without the AI trade, many businesses look well-positioned to deliver decent earnings into the year.
If markets remain buoyant and rate cuts materialise, portfolios should continue to perform. For advisers and clients alike, this remains an investable environment, not a defensive one.
If there is a red flag, it is not regulatory or sector specific. It is systemic: we are building an interconnected ecosystem of small risks that could, in aggregate, produce a larger shock. There is no single fuse to watch, but many.
The world is quieter than the headlines suggest and louder than markets admit. The party may continue, but nobody should forget about the fuses quietly burning in the background.
My third headline is politics- particularly the geopolitical wildcard of the US and its shifting posture under Trump. Last year revealed not only the volatility of domestic policy but also the unpredictability of US foreign behaviour. The case of Greenland has become a litmus test for whether strategic assets can now be spoken about as transactional commodities. It is extraordinary that such discussions can happen in a period of nominal peace, and even more extraordinary that they elicit so little public reaction.
Taken together, the political environment feels primed for misalignment. Markets dislike uncertainty, and 2026 promises plenty of it- tariffs, industrial policy, shifting alliances, and electoral risk.
The most compelling narrative for the year ahead is not that a single hazard looms, but that multiple“ lit fuses” are burning simultaneously: inflation, AI distortion, polarisation in the US, weakened globalisation, consumer indebtedness, and persistent conflicts that struggle to compete for attention.
Individually, any one of these issues would have been headline-dominating events a decade ago. Today they are viewed as background noise. Consumers have gone from using pandemic savings to relying on credit, and the gap between Wall Street and the high street continues to widen. GDP prints look healthy while households feel squeezed, and the dissonance between macro strength and micro strain is
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February 2026 | 13