NAIROBI, Kenya – The global artificial intelligence industry, after years of explosive growth, is entering 2026 at a pivotal juncture. While worldwide spending on AI is projected to surpass $2 trillion, a wave of investor caution and warnings from top tech executives are fueling debate about a potential market bubble, creating a complex landscape for Kenya as it implements its own ambitious national AI strategy.

According to forecasts released in September 2025 by consulting firm Gartner, global AI spending is expected to reach nearly $1.5 trillion in 2025 and will exceed $2 trillion in 2026. This surge is driven by massive investments from cloud service providers in AI-optimised data centres and hardware, alongside increased enterprise adoption. However, this relentless growth is now shadowed by significant market anxiety.

In a sign of growing unease, prominent investors have begun to divest from AI-related stocks. In late 2025, Japan's SoftBank Group sold its entire $5.8 billion stake in chipmaker Nvidia, a bellwether for the AI industry. Similarly, Peter Thiel's fund, Thiel Macro, also divested its entire Nvidia holdings in the third quarter of 2025. These high-profile exits have intensified debate over the sustainability of AI-driven equity valuations.

The concerns are echoed at the highest levels of the tech industry. In a November 2025 interview with the BBC, Alphabet CEO Sundar Pichai warned that "no company is going to be immune" if the AI bubble were to burst, acknowledging that while the current moment is extraordinary, it contains "elements of irrationality." Pichai cautioned that 2026 would be an "intense" year, driven by fierce competition and capacity constraints.

Despite these warnings, demand for the foundational technology of AI remains incredibly strong. Nvidia reported record revenue of $57 billion for its third quarter ending in October 2025, a 62% increase from the previous year, handily beating analyst expectations. CEO Jensen Huang described demand for the company's new Blackwell chips as "off the charts," signaling that the industry's expansionary phase is far from over.

The Kenyan Context: Strategy Amidst Global Uncertainty

This global push-and-pull dynamic has significant implications for Kenya. On March 27, 2025, the Ministry of Information, Communications and the Digital Economy officially launched the country's first National Artificial Intelligence Strategy (2025–2030). The strategy aims to position Kenya as a continental leader in AI, focusing on key sectors such as healthcare, agriculture, and financial services. It outlines a roadmap for developing digital infrastructure, data governance, and research and innovation hubs.

The government has committed KES 152 billion (approximately $1 billion) to the strategy through 2030, with a focus on creating a national "AI cloud" and expanding fibre optic infrastructure. This move is designed to harness AI for economic growth and social transformation, building on Kenya's reputation as the 'Silicon Savannah'. The strategy is seen as a crucial step to provide regulatory clarity and attract further investment into the local tech ecosystem.

However, Kenya's burgeoning AI sector is not insulated from global market forces. The nation's tech hub is heavily reliant on foreign investment and infrastructure. Major cloud providers like Amazon Web Services, Microsoft Azure, and Google Cloud dominate the local landscape, creating dependencies for Kenyan startups. A potential cooling of global investor sentiment or a sharp market correction could therefore impact the flow of venture capital into Nairobi and hinder the growth of local AI companies.

While local AI adoption is growing, particularly in fintech and agritech, the ecosystem is still in its early stages. A global downturn could make it more challenging for these startups to secure the funding needed to scale their operations and compete. The government's strategy, with its emphasis on public-private partnerships for infrastructure development, will be critical in mitigating these risks and fostering a resilient local AI industry.

As 2026 unfolds, the AI industry stands at a crossroads. The tension between unprecedented investment and growing fears of a speculative bubble will define the next phase of its evolution. For Kenya, the challenge will be to navigate this uncertain global environment, leveraging its new national strategy to build a sustainable and sovereign AI ecosystem capable of weathering potential international market turbulence while delivering on its promise for the nation's development.