What does it really take to build the next generation of AI companies when the hype around scale begins to fade and real-world impact takes center stage?

In this episode, I sit down with David Blumberg, founder and managing partner at Blumberg Capital, to unpack what he believes will define the next wave of AI startups. With a track record that includes being the first investor in companies like Nutanix, Braze, and DoubleVerify, David brings a perspective shaped by decades of identifying breakout innovation early. But what stood out most in our conversation was his belief that 2026 marks a turning point where intelligence moves beyond experimentation and becomes operational.

We explore what that shift actually means in practice. David explains how AI is evolving from systems that generate insights into systems that take action, and why that distinction matters for founders, investors, and enterprise leaders alike. He shares how the most compelling startups today are not simply layering AI onto existing products, but embedding it deeply into workflows across industries like finance, security, and supply chain. These are companies built on proprietary data and real operational context, designed to make decisions with precision rather than simply process information.

Our conversation also challenges some widely held assumptions about success in the AI space. David makes it clear that scale alone will not separate winners from the rest. Instead, the focus is shifting toward accuracy, reliability, and domain expertise. Founders who have lived the problems they are solving, rather than approaching them from the outside, are far more likely to build something defensible and lasting. It is a subtle shift, but one that could redefine how value is created in the years ahead.

There is also a broader discussion about where investment is flowing and why. With the vast majority of companies Blumberg Capital now evaluates being rooted in AI, the bar for differentiation is rising fast. David offers insight into what his team is really looking for in founders entering this next cycle, and how startups can stand out in an increasingly crowded field.

So as AI moves from promise to execution, and from experimentation to real-world outcomes, the question becomes harder to ignore. Are we ready to rethink how we measure success in the AI era, and what kind of companies will truly earn their place at the top?

Blumberg Capital On What Investors Really Want From AI Founders Now