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AI Is Coming For These 3 Industries In 2026 (a16z Big Ideas)

AI is reshaping the foundations of industry, finance, and enterprise software. In part two of Big Ideas 2026, we explore three shifts redefining how systems scale. Ryan McEntush breaks down the rise of the electro-industrial stack and the challenge of building a U.S. ecosystem to power modern industry. Angela Strange explains why financial services and insurance are reaching a tipping point, where replacing legacy systems unlocks unified data, parallel workflows, and major margin gains. Sarah Wang looks ahead to a dynamic agent layer that overtakes traditional systems of record. Together, these ideas point to a clear shift: advantage moves from software to systems, from fragmented plumbing to AI-native platforms, and from static records to agent-driven execution. Timestamps: 0:00 Big Ideas 2026 0:36 The Electro-Industrial Stack (Ryan McEntush) 0:56 America vs. China: Industrial Ecosystems 2:12 Blending Talent and Building Prestige 3:56 The Importance of Supply Chains 4:22 A Turning Point in Financial Services (Angela Strange) 4:49 AI-Native Infrastructure and System Unification 5:35 Expanding Categories and 10x Winners 6:24 Why Now? The Drivers of Change 7:25 Opportunities for Early Adopters 8:06 The Power of Unified Data 8:55 Call to Founders: The Opportunity in 2026 9:23 The Dynamic Agent Layer (Sarah Wang) 9:50 From Systems of Record to Dynamic Agents 10:28 The ITSM Example and Agent Layer Value 11:19 The Race for Better Solutions Resource: Follow Ryan on X: https://twitter.com/rmcentush Follow Angela on X: https://twitter.com/astrange Follow Sarah Wang on X: https://twitter.com/sarahdingwang Read more all of our 2026 Big Ideas Part 1: https://a16z.com/newsletter/big-ideas-2026-part-1 Part 2: https://a16z.com/newsletter/big-ideas-2026-part-2 Part 3: https://a16z.com/newsletter/big-ideas-2026-part-3 Stay Updated: If you enjoyed this episode, be sure to like, subscribe, and share with your friends! Find a16z on X: https://twitter.com/a16z Find a16z on LinkedIn: https://www.linkedin.com/company/a16z Listen to the a16z Podcast on Spotify: https://open.spotify.com/show/5bC65RDvs3oxnLyqqvkUYX Listen to the a16z Podcast on Apple Podcasts: https://podcasts.apple.com/us/podcast/a16z-podcast/id842818711 Follow our host: https://x.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see [a16z.com/disclosures](http://a16z.com/disclosures).

Erik TorenberghostRyan McEntushguestAngela StrangeguestSarah Wangguest
Dec 25, 202512mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

AI reshapes industry stacks: manufacturing, finance cores, enterprise agents by 2026

  1. The “electro-industrial stack” thesis says America can match China’s technology but must rebuild scalable, low-cost industrial ecosystems and supply chains to avoid bottlenecks and reliance on vertical integration.
  2. Winning industrial companies will blend Silicon Valley software speed with seasoned manufacturing expertise, co-locate engineering and production, and create mission prestige to attract top talent.
  3. Financial services and insurance are reaching an inflection point where the risk of keeping legacy mainframe-era cores exceeds the risk of replacing them with AI-native systems that unify data into a new system of record.
  4. AI-first financial platforms will parallelize workflows, expand risk/compliance categories by consolidating signals (KYC/KYB, monitoring, service interactions), and create “10x bigger” software winners by absorbing labor-intensive work.
  5. Enterprise software is poised to move beyond sticky systems of record as agents collapse the gap between user intent and execution, creating a new value-accruing “dynamic agent layer” exemplified by IT service management disruption.

IDEAS WORTH REMEMBERING

5 ideas

The hard part isn’t the tech—it’s the ecosystem at scale.

McEntush argues the U.S. can build key technologies (e.g., rare earth processing), but China’s advantage is dense supplier tiers, institutions, and cost-efficient scaling; without that ecosystem, bottlenecks simply move upstream.

Vertical integration is often a symptom of missing suppliers.

Companies like SpaceX/Anduril integrate because the surrounding industrial base can’t keep up; building tiered domestic suppliers reduces the need for full-stack integration and increases speed.

Electrified components are the conduit for software into the physical world.

AI and software influence industry through batteries, power electronics, motors, and compute—not just flashy endpoints like robots—making ownership/reshoring of these components strategically decisive.

Talent strategy is a competitive weapon in industrial tech.

Winning builders will mix fast-moving software teams with experienced industrial veterans, co-locate design and manufacturing for rapid iteration, and build mission prestige to recruit top performers.

Banks/insurers are nearing a “legacy replacement” tipping point.

Strange predicts institutions will let old contracts lapse because mainframes are straining, AI creates visible revenue upside, and credible AI-native vendors now offer re-architected cores designed for unified data and flexibility.

WORDS WORTH SAVING

5 quotes

My big idea for 2026 is that the electro-industrial stack will move the world.

— Ryan McEntush

We can do the technology, but everything else needs to grow with it, or else we're just moving the bottleneck.

— Ryan McEntush

My big idea for 2026 is there will be a dramatic turning point coming to financial services and insurance, where finally the risk of not replacing legacy systems will exceed the risk of change.

— Angela Strange

So as the saying goes, it's not AI that's the competition, it's your competitors using AI.

— Angela Strange

This is the first time that we've seen a genuine threat to that, and that's because the distance between intent and execution is collapsing, and that's creating not a twenty to fifty percent better experience for the user, but how you get to that magical 10X.

— Sarah Wang

Electro-industrial stack and embodied electrificationAmerica vs. China industrial ecosystemsVertical integration vs. supplier networksTalent blending: software culture + industrial veteransUnified data layers in banking/insurance coresParallelized workflows and AI agents in operationsDynamic agent layer replacing systems of record (ITSM)

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