(Preview) Meta and Its Many Plans in AI, Apple Gets Hammered in Court, The Costs of Waiting to Do the Right Thing

A 360 degree look at Meta's AI efforts after Ben's sitdown with Mark Zuckerberg and Meta's launch of a standalone AI app. Then: Reactions to Wednesday's holding that Apple violated a court order and may be criminally liable for its behavior, responses to an email about a broadened understanding of consumer welfare, and a Punchbowl News headache for Amazon.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Andrew Sharp?

  Hello and welcome to a free preview of Sharp Tech.

• 0:08Andrew Sharp?

  Hello and welcome back to another episode of Sharp Tech. I'm Andrew Sharp and on the other line, Ben Thompson. Ben, how you doing?

• 0:20Ben Thompson?

  I'm doing great, Andrew. In the sort of conclusion of one of the longest running sagas at Sharp Tech, my nose is no longer running. I was already physically recovered. I just had a random runny nose that has finished, so I'm feeling great.

• 0:33Andrew Sharp?

  You sound good. And look, when we talked on Monday, you were in Taiwan. We are talking on Wednesday night in America, Thursday morning your time. You are once again in Taiwan.

• 0:44Ben Thompson?

  I am in Taiwan, yes.

• 0:45Andrew Sharp?

  But in between those two podcasts, you did a bit of traveling. You were living the globalist life this week, just popping over for about 18 hours earlier in the week to talk to Mark Zuckerberg. So I'm impressed that you're feeling better at all. If I'm traveling that far in the span of a day, my body usually feels it afterward.

• 1:04Ben Thompson?

  Yeah, no, it was actually about 11 hours, which is actually better. And no, it shocks everyone. No, the shorter the trip, the better. There's no adjustment. You go there, you sleep on the plane, you're there, and then you get on the plane, you sleep on the way back and it's not that, I mean, yeah, not that big of a deal. I've got a son who's a douche. I mean, yes.

• 1:25Andrew Sharp?

  This is what I mean. I love when we expose you as a globalist. This is.

• 1:28Ben Thompson?

  It's really bad. It's really bad. You know, look, this was a, this was a week I spent a lot of money on techery content. I bought a ticket to fly to America. I don't accept, and then I spent $1,200 on a punch bowl subscription.

• 1:43Andrew Sharp?

  Great stuff. Well, we've got a lot to get to.

• 1:46Ben Thompson?

  I feel like I got more value from the, from the airplane ticket. I'm going to tell you that, but anyhow.

• 1:52Andrew Sharp?

  But you did the right thing. You subscribed. We have big tech news across the board here. We had some Apple news.

• 1:59Ben Thompson?

  I do feel, I do feel like I was gonna do the, I subscribe to everything, as you know, because you, you know, you, we have a, you know, it can benefit you as well. And I'm a believer in the subscription model, so I'm not going to like, you know, if people want a subscription model, that's great. I want to support that. I looked at that Punch Bowl line for a long time and I'm like,

• 2:21Andrew Sharp?

  As a matter of principle, you could probably find your way around the paywall. You were trying to do the right thing, but man, they made it hard, but you did it.

• 2:29Ben Thompson?

  Yeah. And I'm like, you know, look, I can't say it was too expensive to re subscribe when I make a lot of money off subscriptions. I can afford it. So I paid it, but yes.

• 2:39Andrew Sharp?

  There you go. Well, and for anybody who didn't read Wednesday's daily update on St. Techery, what we're referring to is Punch Bowl. They have a premium tier and a newsletter that's dedicated specifically to tech policy reporting that broke a little bit of news that was quickly condemned by the White House and then walked back by the

• 2:59Ben Thompson?

  About Amazon. I think we'll get to it in a little bit.

• 3:01Andrew Sharp?

  We will, we will. But the point is it was behind a paywall and it was a $1,300 subscription to get behind that paywall. Okay, 1,200. Yes.

• 3:11Ben Thompson?

  If you want any Punch Bowl news items, just hit me up on WhatsApp and you'll

• 3:17Andrew Sharp?

  I can't wait. I'm going to be following all year. All right. So we have Meta, we have Apple, we have Amazon. We'll start with Meta. On Tuesday, Meta announced they're launching a standalone Meta AI app built on Llama 4, which they described as the first step toward building a more personal AI. Get excited. So you visited Meta, spoke to Mark Zuckerberg. I believe they allowed you to demo the app a little bit. I don't want to step on everything you discussed with Zuck, but let's start with the obvious question. Why is Meta launching a standalone app and what interests you about this effort?

• 3:56Ben Thompson?

  It's pretty interesting because I, my initial thought is to be anti the Meta AI app. In that the like,

• 4:07Ben Thompson?

  I feel like Meta has so many opportunities around generative AI that there's an extent to which the app is almost like a distraction.

• 4:16Andrew Sharp?

  Right, distracting yourself with a competition with ChatGPT that you're probably not going to win anyways.

• 4:22Ben Thompson?

  Right, exactly. And so like, what's kind of like, what's the point here? I think I've come around to, I like it. And so I think that evolution is sort of interesting. So, big picture, if anything, I feel like Facebook is insufficiently ambitious about generative AI with their services. In that, like, my vision, which I articulated last year, like, first off, I think the ad opportunity is massive. And that's why I've always been very bullish for Google and Facebook in particular. We've talked about the black box advertising. Just tell us what you want to achieve and we'll do it for you. Now you add on this completely new variable of we'll actually make all the creative for you and everything. And given to how they dominate

• 5:03Ben Thompson?

  the long tail of advertisers and the leverage that gives them in the market and the anti-fragility that gives them. And in Google's case, like, the whole ad anti-trust bit is downstream of a bunch of small, medium-sized advertisers that just don't go anywhere else. And like, that's the leverage Google has in these markets. And this seems tremendously additive.

• 5:26Andrew Sharp?

  And can I just add one note on the ad business and what's possible there? There was one line that Zuckerberg had on advertising in your interview where he was talking about companies coming to Meta with certain demographics they want to target. And Meta basically says, "Look, we can go with your demographic, but you're going to end up limiting yourself if you don't just trust us to find the customers for you. We'll find more customers that way." I think Zuck's exact words in the interview were, "We believe at this point, we're just better at finding the people who are going to resonate with your product than you are." And I think I knew that that was true, but the dots hadn't been connected until he articulated

• 6:09Andrew Sharp?

  it that way. And AI should make the value proposition, you know, twice as valuable going forward if they could do all the creative for people as well.

• 6:19Ben Thompson?

  Absolutely, and I think that's actually been the case for a long time. But there's a bit where it's just so obviously the case that even probably the bigger advertisers that have teams that do measurement and do all their own targeting. It's kind of getting to the point like just you gotta give in.

• 6:34Andrew Sharp?

  Stop spinning your wheels, just trust us and pay us.

• 6:37Ben Thompson?

  Eric and I talked about this a bit last week and it's always been the case for the smaller advertisers. And now it's getting the case like just give into the black box. Like it's like you know that Facebook gets better margins on the black box. Yet they get better margins and you get better returns. And you just sort of have to accept that that's reality. And I think that's, that's definitely, that's definitely increasingly the case.

• 7:00Andrew Sharp?

  Mm hmm.

• 7:00Ben Thompson?

  So, so that, that opportunity is clear. I was glad he articulated it. I've obviously been big on that. But, but there's, you know, people are using Meta AI in the apps. You noted it's by and large in WhatsApp, uh, which is, which we'll come back to in a moment. Like you, you can have a conversation in group chat, you can talk to people, you can talk to Meta AI. And it's, it's, it fits with our talk about chat is the natural interface. And then the third one is, you know, content in the apps, like, uh, call it slop, call it what you will. Uh, Facebook, we've talked about Netflix, right? There's a lot of filler content that Netflix comes up with when you're like the default like TV experience. And somehow people watch seven or eight hours of TV a day. It's not all prestige TV.

• 7:41Ben Thompson?

  Uh, that is also Facebook and Instagram and reels and stuff in mobile. And so that might be AI generated. And the costs there are kind of interesting because it's actually more expensive. Because as opposed to people just pushing their own slop, but hey, the more slop, the better, right? I mean, uh, do I say that verbally tongue in cheek? But from a business perspective, the more slop, the better. So there's also two more ones, which I'm very excited about from my perspective, which is number one, maybe I'm the only one that still thinks ARVR could be a thing at some point. I think this Gen AI is going to be critical.

• 8:15Andrew Sharp?

  Definitely the only one on this podcast, but yes.

• 8:17Ben Thompson?

  Do all of this? And then, uh, the other thing is. Everything on Facebook should be understandable and monetizable, right? Like, we talked about like the t-shirt thing. Like, if you're, you have a cool t-shirt on right now. If you posted the Instagram photo and I like your t-shirt, why should I be able to click on that and be able to buy that t-shirt, right? Like, I mean, this is a bit more far-flung. There'd be a lot to figure out here. But like, I just, the, it's theoretically possible and there's just so much to do. Why do you need to compete in the chat app arena?

• 8:50Ben Thompson?

  That's it, I think he changed my mind.

• 8:51Andrew Sharp?

  Okay.

• 8:52Ben Thompson?

  And so a couple of compelling points that I think he made were, number one, in the US, WhatsApp isn't dominant. And which is, his point that he thinks is going to surpass iMessage was an interesting sort of aside. But in the US, we use different apps for different functions. It's not a super app sort of situation like the sort of China thing. And it's funny because I wrote about this years ago, including in the context of Facebook and their desire to make a phone and saying, "Look, path dependency matters. The way the US market works is if we use different apps for different things. That's the way things are organized." And to that point, if they want to compete in the US market, you need a standalone chat app. That's the way people are conditioned to experience it. It's the most important market.

• 9:35Ben Thompson?

  It's the most valuable market in terms of advertising in the long run. And so that's number one. Number two, this idea that they have a head start in personalization and the AI knowing you because they're Facebook.

• 9:49Andrew Sharp?

  All right, and that is the end of the free preview. If you'd like to hear more from Ben and I, there are links to subscribe in the show notes or you can also go to sharptech.fm. Either option will get you access to a personalized feed that has all the shows we do every week, plus lots more great content from Stratechery and the Stratechery Plus bundle. Check it out, and if you've got feedback, please email us at [email protected].