The Divergence - Annual Report 2026
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Annual Report / 2026

The Divergence

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The Age of Scaling Ends. The Fork Begins.

Last year was the Unhobbling. We removed the bottlenecks. Models got faster, cheaper, and safer. But they did not fundamentally change. The release of ChatGPT-5 was competent, impressive, and incrementally better. It was not the singularity.

The ceiling of the scaling doctrine is now visible. As Ilya Sutskever warned, adding compute to an algorithm that fundamentally learns the wrong way yields diminishing returns. We have hit the plateau.

This year, we stop waiting for the magic. We start building the divergent paths.

2025: Retrospective
Context / 2026

Two Worlds. Two Stacks.

The plateauing of LLMs has triggered a search for new foundations. Yann LeCun’s push for "World Models"—AI grounded in physics rather than text—is one escape route. DeepMind’s Genie 3 is another: simulation as a training ground. These are deviations, not extensions.

The Theological Fork

The middle ground is evaporating. On one side, effective accelerationist (e/acc) cults view GPU clusters as altars. On the other, neo-luddite resistance cells are sabotaging data centers. The "safety" debate has mutated from policy to theology. There is no consensus reality anymore—only those who worship the machine and those who fear it.

The Geopolitical Fork

The world is splitting into two distinct compute spheres. On one side, the US-led alliance controlled by silicon sanctions. On the other, the Chinese autarky driven by necessity. Data sovereignty is the new border control. The era of the global internet is over; the era of the Sovereign Stack has begun.

The Enterprise Fork

The corporate world is splitting into "Centaurs" and "Dinosaurs." Centaurs aren't just using AI tools; they are structurally distinct, automating their core logic loops with 90% fewer headcount. Dinosaurs are merely automating the margins. The gap in margin structure between these two types of firms is becoming insurmountable.

Trends 01 — 12

 

SUNDAR PICHAI
CEO, GOOGLE
WATCH
— CONCLUSION

The Neutral
Era Is Over.

Convergence was a comfortable myth. We believed globalization and the internet would smooth out the edges of the world. We were wrong.

The edges are sharpening. The stacks are separating. We are not just observing a technological shift; we are witnessing a reality bifurcation. The only winning move is to pick a side and build.

THE DIVERGENCE
REPORT ID: 2026_V1
STATUS: FINAL

© 2026
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Credits
  • Elliot Leavy
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