Former Cisco (CSCO) CEO John Chambers wants to put the great AI debate to rest.
“I think 2026 will be a great year for AI,” Chambers told Yahoo Finance’s Opening Bid. “Productivity will grow faster than almost anybody realizes. I think the market is underestimating that on earnings.”
Chambers, who led Cisco through the dot-com boom era and the Great Recession, has dismissed the bubble talk, arguing that AI is a “decade-long phenomenon” that is still in its early innings.
He doubled down on the widespread utility of AI — from retail and automotive to healthcare and government — which are beginning to materialize “rapidly” at companies such as Walmart (WMT) and Ford (F). While use cases vary, both companies are using AI across their supply chains.
Chambers spent over 25 years with Cisco Systems, taking over as CEO in 1995. Cisco is the largest networking company, providing the routers, switches, and hardware that form the backbone of the modern internet.
Under Chambers’s leadership, the company’s annual sales grew from $1.2 billion to roughly $50 billion, briefly making it the most valuable company in the world during the late 1990s. He retired in 2015, but his experience navigating a technological revolution — the internet — gives his AI analysis a unique historical context.
Now, as the founder and CEO of his venture capital firm, JC2 Ventures, Chambers focuses on helping startups scale.
While Chambers is optimistic about the overall AI play, his outlook is not entirely rosy. He injected some skepticism toward the current euphoria hovering above some of the industry’s biggest names, which could lead to significant market pain for others.
He predicts that among the vaunted “Magnificent Seven,” some are likely to “stumble over the next year or two.” Mid-level companies and smaller startups face an even sharper threat. Ultimately, he forecast “train wrecks” for companies lacking a clear, cohesive AI strategy.
He added that the money to invest in AI is there, but the financing will become “challenging” for players that haven’t developed a plan. Accessing that capital will be the ultimate test of survival.
For investors looking to weather the inevitable shakeout, Chambers singled out players like Microsoft (MSFT) and Google (GOOGL). He praised Nvidia (NVDA) CEO Jensen Huang as a “machine,” emphasizing the essential role the company plays in the AI boom. He also highlighted CEO Lisa Su at Advanced Micro Devices (AMD) for the chipmaker’s aggressive moves in the AI chip space.