Apple and the Power of Platforms, AI Comes for Google Search, ChatGPT Comes for Higher Education

Talking Platform Power and 15 years of App Store arguments, with topics including Ben's memories from Microsoft, the difference between regulating platforms and aggregators, and the case for intervening in the App Store today. Then: Eddy Cue testifies that Apple is exploring AI search options for Safari, and a New York Magazine feature on ChatGPT in colleges sparks thoughts on tech, higher education, and Blue Books.

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

• 0:04Andrew 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?

• 0:16Ben Thompson?

  I'm doing well, better than you. I feel like you blew all your being right points picking.

• 0:22Andrew Sharp?

  You can't win them all.

• 0:24Ben Thompson?

  April.

• 0:24Andrew Sharp?

  Yeah.

• 0:25Ben Thompson?

  You've been wrong about everything ever since, but you know, so it goes.

• 0:29Andrew Sharp?

  You know what? It was worth it. If it meant that I had to forsake all my pick karma for the remainder of the playoffs, it was worth it because that's how satisfying the Lakers' loss was in round one to my Timberwolves. Really rough outing for the Wolves earlier this week against Steph Curry in game one. And honestly, I'm bummed. Monday night, we had both the Celtics and the Thunder taking it on the chin as massive favorites and it was just so much better than tonight when the Celtics are rolling as we come on to record. I'm sure the Thunder are going to kick Denver's ass later tonight.

• 1:07Ben Thompson?

  I do, I do have an announcement and apologies to everyone who's not in for the sports, but I have decided that I am cheering for Denver to win the title. And the reason is I'm just psychologically tortured by the fact everyone universally acclaims Jokic is the best player in the NBA, despite the fact there's absolutely nothing in his resume that is better than than Giannis is. I mean, they both should have the equivalent of MVPs. Giannis does have a defensive player of the year, which Jokic, you know, doesn't play.

• 1:36Andrew Sharp?

  Good luck, maybe one day.

• 1:38Ben Thompson?

  And you know what? Let him have another title just for my own peace of mind. Then there will be no questioning or disputing it. I'll be happy to get on board. So just so I can stop raging against the world defending Giannis.

• 1:52Andrew Sharp?

  I mean, it sounds like all the followers of @NoTechBen should be rooting for Jokic as well to get this done, you know? Let this particular crusade just pass you by.

• 2:02Ben Thompson?

  So it goes. Let it be whatever, whatever phrase is appropriate in this circumstance. Enough basketball though, let's, uh, let's move on.

• 2:09Andrew Sharp?

  Indeed, enough basketball, enough with the reality check night around the NBA. We are going to bounce around on this episode and we will start with a bigger picture piece you wrote on Apple and the App Store and the nature of platforms. But as a preliminary question, I want to focus on one sentence from that piece. You wrote, "Before I started at Strategery, I worked at Microsoft recruiting developers for the Windows App Store." Can you give me any color from that era of your career? What year was it? What sorts of developers were you pitching? What became of the Windows App Store?

• 2:48Ben Thompson?

  Well, there's actually a few. There's a few undocumented aspects of this. Once documented aspects of this. I am not one to delete tweets. You know, by and large, I think that, you know, what I say is out there for better or worse, even though I've always argued that Twitter should delete tweets by default. Like, I think Twitter would be a much better platform if it just auto-deleted everything after like a week.

• 3:12Andrew Sharp?

  I fully support deleting tweets. There are a lot of people who look at it as an act of cowardice. I think it's an act of, you know, sanity. It makes sense because divorced from context, there's all sorts of tweets that can come back to bite you. We're all on Twitter trying to have a good time. It doesn't need to be anything more than that.

• 3:31Ben Thompson?

  No, the only reason to go back dig through people's tweets by and large is to try to just like do back things to them. Yeah, no, exactly. So I am in favor of deleting tweets also, but I don't delete my own tweets most of the time. But back when, you know, back when I was in business school and, you know, looking for a job, I did ultimately end up at Microsoft. And I decided, you know, I should probably be, prudence is the better part of valor here, and I had a lot of tweets extremely critical of Windows 8 when it was first announced and the entire concept of it. And this idea that Microsoft was going to leverage and completely transform the Windows experience into this touch-first experience.

• 4:15Ben Thompson?

  And it wasn't going to work. They were too late. You know, all these sorts of pieces, which in some respects I wish I had held on to because they were totally correct.

• 4:28Ben Thompson?

  You know, the Windows 10 was like the apology tour for Windows where it's still nominally had the initial like blocky start screen and stuff, but you could just get rid of it and use, you know, Windows as normal. It undid a lot of the things with Windows 8, but all the same, I needed a job. I went to Microsoft.

• 4:45Andrew Sharp?

  I was gonna say, so you're deleting this in the middle of the interview process. Is that right?

• 4:49Ben Thompson?

  I don't remember when exactly I wiped it all out, but I'm like, yeah, you know, maybe, maybe better, better to not be out there. And for the record, I went in there and gave it a good college try and it was a ton of fun. Like it actually worked out really well for me personally because I joined a team that was nominally focused on, I think it was OneDrive or something like that. But within like a month, our team got switched to working on the Windows App Store. And or actually, you know, the, the, the Windows 8 might have happened after I was already had the offer letter. I hadn't joined yet. Anyhow, whatever. So I think I actually like discretion was a better part of valor within like, you know, two hours of posting my tweets. But, but regardless, uh, our team got switched to, we're gonna do, do the App Store and developer relations.

• 5:34Ben Thompson?

  Both our team dealt directly with the biggest developers and then sort of enabling what's known as the scale motion. Microsoft has this huge team of people all over the world that interact with developers. Like I've been writing about the last couple of Microsoft earnings calls because one of the reasons they missed on earnings or slightly missed a quarter ago was because their scale motion was messed up. In this case, their scale motion was too focused on AI. Basically, they had a lot of the, their field pushing small and medium sized businesses to adopt AI. And the small and medium sized businesses are like, we're not ready to do that. So, and so they're like, no, we don't get them back to just doing normal, like get them on the cloud basics sort of things. And, and that was sort of a repair they needed to make. I created the.

• 6:19Ben Thompson?

  The, the, like, they had a presentation for the scale motion. That was terrible. And so, one time on a plane, I'm like, this is such a bad presentation. I hate using it. I can't imagine what I was trying to sell when it was on this. So I just rebuilt the whole thing, kind of from scratch. Ended up being used all over the world by, you know, by thousands of people.

• 6:36Andrew Sharp?

  That's awesome.

• 6:37Ben Thompson?

  No, it wa- it was awesome. It was, it was, it, so, oh, our team stepped in, and so I actually ended up with a role that was like a level 64 role. This is Microsoft nomenclature, even though I was only level 61 or whatever. So I was like, I, I had like way more responsibility and was doing way more things than I would have normally. It worked out very well for me. It was a ton of fun. Worked super hard. I got the Kindle team on board. I got, uh, the WordPress on board, or, or, or automatic on board with the WordPress app. They were in like the initial announcement of the app store. Those were two of the featured apps. Like, it was, you know, I, I worked with a lot of the publishing industry. I got a lot, learned a lot about publishing and, and, you know, the, the challenges and issues that, that they had. Lots of trips to New York.

• 7:18Ben Thompson?

  And all fun, and then Windows 8 actually watched, and then it wasn't very much fun anymore.

• 7:25Andrew Sharp?

  And so, when you say not much fun anymore, are you still interfacing with those companies and having to explain, like, don't worry, one day the users will get here?

• 7:35Ben Thompson?

  Right. Of course, you go out there, you're like, Windows has a billion users. Everyone's gonna use this. Like, you're, you're, you're selling this story that, you know, this is, you'll get in ahead of the curve. Remember, don't you wish you had been ahead of the curve with the iPhone or, or, or with Android or whatever it might be? And the reality was, was there was no curve to get ahead of. And so, you're, what are you ahead of? You're ahead and you're stuck in the desert, right? And, uh, and as part of this, you know, some of the, some of the companies built the apps themselves. Some of them did, were like, fine, we'll do it. But, you know, like I said, like, there was definitely pain going on. And like, we, we worked with a third developer, like, like, uh, these different shops that would actually build the apps for them.

• 8:15Ben Thompson?

  Very useful experience. Learned how to manage software projects, understand, you know, like, like, when you're being BSed, when, when, you know, when there's actual legitimate problems, like, working with a, a, a in-development API that was, you know, not stable. Was a phenomenal learning experience. Um, and then the learning experience was more about, uh, managing dashed expectations, which was again, not nearly as fun. So, uh,

• 8:40Andrew Sharp?

  Well, and it, it seems like it would be good experience to get windows into how all the pardon the pun with windows, but to be given a, a look at how all those other companies are doing business and what they want out of a platform. Does any of that resonate?

• 8:54Ben Thompson?

  For sure, for sure. And, and you know, I just, just in, just an in-depth understanding of how everyone's thinking about the space and like, again, and a lot of the specifics that go into it. Like what are the actual, what do companies actually think through when it comes to launching an app or, or a new service? Like it's not just about building the app. It's the maintenance. It's the fact that even if you have a small number of people using it, if you cancel it or deliver a bad experience, those small number of people can be very vocal and can tank your reputation broadly. Like that's a big risk, uh, why, why you would want to, even if someone else is paying for it to build an app. But the, you know, the, the overall question

• 9:36Ben Thompson?

  that, that I wanted to mention this in passing that I think is important. It's often framed, the question of apps and platforms is framed as a chicken and egg question. You need apps to get users because users want to use the apps. But you need users to get the apps because the developers want to serve users. And my contention, which I actually made this point nine years ago, I think, uh, in the context of, of the iPad and, and Apple and Microsoft. So it's not a fresh point, but I think it was, I, I thought it was worth. You know, there's sometimes I've been, yeah, I guess I made a point there in the past. I have a somewhat encyclopedic memory of what I've written. Most people don't. And I thought this case was a good point to just mention again.

• 10:20Ben Thompson?

  The chicken and egg fallacy is a fallacy in this case, or it is a fallacy. It's not, it's not a conundrum. The reality is users come first. And this is obviously in line with your techery in general. My whole point that demand is what matters, not supply. But the other point I wanted to emphasize with this article is I think there's also a lot of, just like the chicken and egg thing is ultimately a dishonest, dishonest isn't the right word, but it's an incorrect description of the dynamics at play here.

• 10:57Andrew Sharp?

  Mm hmm.

• 10:58Ben Thompson?

  There's been a lot of dishonesty slash incorrect depiction slash wishful thinking of app store dynamics all along. And some of it came from me, I think particularly in the early years. I, I backed off this a long time ago because what I wrote in this article has become clearer and clearer to me. But I thought making it explicitly clear that the reality of the app store is this is just a fight about money.

• 11:27Andrew Sharp?

  Mm hmm.

• 11:27Ben Thompson?

  Because the app store is so important. The iPhone is such a big platform. There's so many users who are worth so much money that there's basically nothing Apple can do that will stop developers from building for it. And so at the end of the day, it's, it is a bit of a sympathetic frame on Apple's positioning, which is you're just asking Apple to be generous. And the only, all the cautions, Apple, you're gonna have, developers are gonna flee your platform. No, they aren't. That's not gonna happen. The only valid critique for Apple all along that has stood the test of time and was validated

• 12:08Ben Thompson?

  in this case is you're inviting government regulation or a judicial decision. That's always been the only hang up. And I think it's worth being crystal clear about that.

• 12:18Andrew Sharp?

  I didn't think it was all that sympathetic. I, I thought it was more just a realistic, clear eyed look at Apple's motivations in the midst of all this and Apple's incentive structure in the midst of all this.

• 12:30Ben Thompson?

  I mean, I do like puncturing tech myths though, right? Like, I always love talking about, everyone's like, oh, the Windows beat the Mac because it disrupted the integrated product with the modular player. And I'm like, no, that's actually completely incorrect. The Windows 1, because it built on DOS, which was distributed by IBM. It had one before the Mac ever came along. And that summary of Windows versus Mac leads to really bad analysis from people I really like and respect. Like, this is a Clayton Christensen reference, who, in my estimation, completely misunderstood the computing market, precisely because he misunderstood the Windows versus Mac dynamic. And he misunderstood it because he just repeated what was totally accepted wisdom. The totally accepted wisdom is totally wrong and led to bad analysis.

• 13:15Ben Thompson?

  And I think there's a similar thing here. Everyone is all about, you need developers to build platforms. And the answer is, no. You need a good product that collects billions of users. And then you get a platform sort of by default. That's how it actually works.

• 13:37Andrew Sharp?

  So, the headline of your piece was "Platforms Are Underrated." Can you define for any normies in the audience, what distinguishes a platform from an aggregator?

• 13:47Ben Thompson?

  Yeah, a platform is, in this specific case that I'm using it here, it's like an operating system. It's something that has APIs that would third-party developers build on top of it. So if you're a Photoshop, you depend on macOS existing. You depend on Windows existing. You depend on iPadOS existing. It's a foundation on which things can be built. And so that's the conundrum here, is they, platforms are one of the largest value-generating things, basically, ever. There's, like, all of the value in technology, by and large, is built on top of platforms. And so that, they're super important. We should want them to exist.

• 14:33Ben Thompson?

  They should have a lot of leeway, by and large, because their benefits are so significant. But, the reality is, is that also gives them, basically, untrammeled power. And that's why I didn't mention it, but I put the Lord Act on quote at the beginning, that power corrupts. And, you know, at the end of the day...

• 14:57Ben Thompson?

  All appeals to Apple about the App Store have been an appeal to Apple's better angels, as it were. And the reality of, I'm gonna sound like a Marxist here, shareholder capitalism in 2025.

• 15:11Andrew Sharp?

  I was gonna say.

• 15:11Ben Thompson?

  Is.

• 15:12Andrew Sharp?

  The baby bird is growing up to be a proud anti-monopolist falcon here before our eyes. I love to see it.

• 15:20Ben Thompson?

  This has been my whole point about, so aggregators, on the other hand, there is no lock-in. You don't have to use Google. You don't have to, like, like, Google always says, another search engine or another site is, is a click away. That's totally true. Like, until that is the fundamental difference, why aggregators are different than platforms. Aggregators depend on users choosing to go there, but that is a choice users make that is not forced on them. Platforms are much more like, like railroads. Like, someone built it and it's there. That's right. They're infrastructure. And that's why I've always been so critical of the anti-monopolists focusing on aggregators.

• 16:00Ben Thompson?

  I'm like, solve the platform problem. That is an actual, they are making choices that are restricting innovation, restricting competition, that is addressable and can be fixed. With aggregators, you're trying to change the preferences of billions of people, which is impossible. Like, there's a bit about the whole anti-monopolist take against aggregators that, that is similar to the worst utopian visions. Like, there's a saying, right? If it was, if people just did X, if your political program entails people doing X, your political program is doomed. And if you get power, you're going to be authoritarian because you're gonna get frustrated.

• 16:44Ben Thompson?

  People don't do what you want, and you're gonna make them do it. That like.

• 16:47Andrew Sharp?

  Make life worse for everybody. Yeah.

• 16:49Ben Thompson?

  That's right. And that, the, all the anti-monopolists focused on the aggregators are adjacent to this because they're actually frustrated at the individual choices of individual, individual consumers. Platforms, on the other hand, it's a point of leverage that you can address that can fundamentally transform the economic value that they provide. And, and it is driving me, it's like, an environmentalist that is anti, that, that, you know, they were anti-nuclear for years and now they're, they're, they're, you know, a clean energy advocate or anti, whatever it might be. It's like, if you. We can have a debate about nuclear costs and all those sorts of things, but I'm not going to take you seriously if you spent years objecting to fundamentally

• 17:32Ben Thompson?

  clean energy in terms of its impact on global warming or the atmosphere, all those sorts of things, because I don't think you're serious, because you don't, you're not actually thinking through trade-offs here. It's a similar thing here. If you're worried about monopoly in tech and you're obsessed with Google and Facebook and have turned a blind eye to Apple in the App Store, it's hard for me to take you seriously.

• 17:55Andrew Sharp?

  Yeah, well, I mean, I think those people don't really exist. I think everybody who's concerned about Google and some of the aggregators are also concerned about platform abuse.

• 18:04Ben Thompson?

  The priority order matters. Like, you don't get to say, "Oh, I care about all of it." What do you actually focus your time and energy on?

• 18:12Andrew Sharp?

  Yeah. Well, your article, more generally, was a great meditation on 15 years of this conversation. And your articulation of the App Store platform specifically, you wrote, "Once there are users, there is demand for applications, and that is the only thing that incentivizes developers to build. Moreover, that incentive is so strong that it really doesn't matter how many obstacles need to be overcome to reach those users. That is why Apple's longstanding App Store policies, egregious though they may have been, ultimately did nothing to prevent the iPhone from having a full complement of apps, and by extension,

• 18:55Andrew Sharp?

  did nothing to diminish the attractiveness of the iPhone to end users." So, it ultimately didn't matter how good a salesman you could have been for the Windows App Store, because Apple's users were the ultimate moat for...

• 19:08Ben Thompson?

  I was a great salesman.

• 19:09Andrew Sharp?

  Yeah, exactly. And it didn't matter, you know? You gave it the college try, good faith effort. I thought, in general, it was just a great, sober look at the realities of Apple's market power, Apple's policies, and why those policies haven't changed over the last 15 years. I will say, for me... It was interesting to read your article as an like an outsider to tech because the conclusions were all a little bit self evident at this point. And I missed the era when people were arguing that the App Store being locked down was going to really cost Apple's business. I missed the like seven years of the argument. And today it's clear that it hasn't really affected Apple's bottom

• 19:54Ben Thompson?

  It's funny because this is adjacent to where I really cut my teeth early on with the App Store. And I mentioned the Clayton Christensen angle. I've said this before on the podcast, but the dominant sentiment was that Apple and the iPhone were screwed because everyone was going to flee to Android. And my whole point all along is no, they aren't like you don't like. And it's funny because it's it's almost we're both laughing at the possibility. This was an argument, but literally I spent like three years on Strategery arguing this point and built my entire business.

• 20:27Andrew Sharp?

  It's worked out well for all of us.

• 20:29Ben Thompson?

  It goes to show like how stuff becomes super obvious over time. But that was another example of just like there's these myths and fallacies that are spun up that actually have are not correct. And that's just another example there. And yes, the same thing with the App Store and App's power and Apple's power. No, it was absolutely assumed that they needed to do. And it's interesting because the counterpoint is that look at the Vision Pro. You Ben wrote an article saying part of the reason the app I wrote before the Vision Pro came out that it was in trouble because entities like Netflix and YouTube were not going to be on there. And I'm like, why would they go on there? Why would they want to help out and take a chance with Apple? Given how poor you know, Apple's treatment of them. And it's interesting because that article

• 21:14Ben Thompson?

  was written before the Vision Pro came out, which was similar to my time at Windows 8. And I can tell you at from that time, people are more receptive. The potential is a bigger selling point than reality. And, and so I do think.

• 21:30Ben Thompson?

  There that was true then, the fact you couldn't get a Netflix on board. What is a really bad look for Apple and its state of developer relations?

• 21:38Andrew Sharp?

  Yeah.

• 21:39Ben Thompson?

  The reason you can't get Netflix on board today is because there's no Vision Pros in the market. Like, like, and so, and if, if Apple sold, you know, millions of Vision Pros tomorrow, Netflix would get an app for it. Like, like now they're purely in market dynamics. So to the extent that critique held, it, it, it holds in the potential era before something happens. When, when you're, it's all kind of fuzzy and no one has proof points. And it's like, well, I've scratched your back all these years. Will you scratch my back and put an app on here for you? And Apple's like, I've stabbed you in the back for 10 years. Will you, will you scratch my back?

• 22:14Andrew Sharp?

  Yeah. Well, and I mean, for five years now, the risk has been a regulatory risk, and that's the incentive to potentially adapt and evolve for Apple. But they haven't done it. Um, two more emails I want to read before we shift gears. First is from Vishal. He says, why shouldn't Apple charge whatever they want for their IP? They don't have 100% market share over app platforms. If Spotify or others don't like paying 30%, they can sign people up on other platforms. I don't understand why this is an issue. So I could answer this, Ben, but I get the sense you wrestle with this.

• 22:51Ben Thompson?

  No, no, I'm, I'm curious your answer.

• 22:54Andrew Sharp?

  I mean, first of all, my answer would be that Apple can and will charge whatever they want in the App Store. And Apple's probably going to continue charging 30% fees on in-app purchases. And none of this will really change until Congress intervenes, because in-app purchases is still going to be a massive business. And the reason Congress should intervene on the 30% fee, and the reason there should be a ban on Apple's anti-steering provisions, is that over time, the economy will produce better outcomes for more people if everyone who wants to run some kind of business on a mobile phone isn't paying a 30% tax to Apple or Google.

• 23:34Ben Thompson?

  So are, are you, are you saying those as two separate things? The in-app purchase and anti-steering because those are two distinct, those are two distinct questions.

• 23:44Andrew Sharp?

  Things, yes. And I think the in-app purchases are now being overlooked as everyone says, all right, no more anti-steering. It's all good. It's a whole new era. I think the in-app purchases are still going to be an issue going forward unless Congress addresses that issue. But perhaps we'll cross that bridge in a couple of years. I just think, I understand where Vishal is coming from.

• 24:06Ben Thompson?

  Whoa, no, we're going to cross that bridge in this podcast right now. Have you heard you?

• 24:10Andrew Sharp?

  Well, and I understand where Vishal is coming from. Like, Apple has a right to capitalize on having a great product, and Apple has capitalized on having a great product. But I would say adhering to that principle starts to look ridiculous when you're then defending Apple's right to collect perpetual taxes on millions of digital businesses who just have no practical alternative but to pay Apple merely for the right to exist. What do you think?

• 24:40Ben Thompson?

  So I have a few responses. I'm going to start by responding to you and then I'll respond to Vishal.

• 24:47Andrew Sharp?

  Okay.

• 24:47Ben Thompson?

  My response to you is, the reason I do, the reason I called out that distinction is, to your point, which you acknowledged, you should be able to harvest the benefits of your, of your creation, right? So we agree on that at a high level. I think by and large, the user experience of in-app purchase is a great thing that Apple created and should be able to benefit from. This, like, it's a perfectly, we can accomplish our goals by letting apps go out to the web. That's what they control. Why do they get access to Apple's infrastructure? The issue with this steering thing is this, this Apple, it's not a free speech argument,

• 25:29Ben Thompson?

  but it's like philosophically a free speech thing. They're not letting developers

• 25:35Andrew Sharp?

  Freedom of commerce.

• 25:35Ben Thompson?

  Talk to their users.

• 25:37Andrew Sharp?

  Yeah.

• 25:37Ben Thompson?

  Because, which is, this is Apple's problem. Is setting aside all the legal stuff. This specific aspect is so gross. It just kind of disgusts everyone, including me. And, and my view is, is it a little clunkier to go out to a webpage? And have to make sure you're signed in. And again, tokenization helps fix this, but do a purchase, then go back to your app is a little clunkier? It absolutely is. Guess what? Apple gets to have a better experience because they created the better experience. I have a much more difficult time. And in fact, pretty strenuously object to developers having a right to Apple's integrated purchase. When they can do their own purchase on their own website.

• 26:21Ben Thompson?

  If you want to use Apple's purchase flow, Apple gets to have a take. And I think that's totally reasonable. And I think you are going too far to say it's not just that you get to collect payments from users without giving money to Apple. You also have not just a right to communicate to users, which I think is fine. You have a right to Apple's creations to do so. So, so I would just disagree with you. Number one.

• 26:45Andrew Sharp?

  That's fair. And I will just add that Apple and the anti-steering provision. I'm only a couple of episodes into Andor, season two. But it's real imperial behavior from Apple trying to collect fees from external websites. Um, days on from the initial link click. Um, but yeah, I actually agree that in-app purchase is a wonderful customer experience. And that's one of the reasons I'm confident that this issue isn't going to go away. Because a lot of people are just going to prefer to do business in the app.

• 27:16Ben Thompson?

  Yeah, but now we're getting to entitlement. Why do developers have an entitlement to a better experience? They can own websites. This is what I actually agree with Vishal that they could make their own platform with a beautiful, smooth experience. They want access to, to, to, to Apple's platform.

• 27:32Andrew Sharp?

  Now, seamless, frictionless purchases. Yes, I just think that rates are super competitive.

• 27:37Ben Thompson?

  Well, let's talk about the rates. What's interesting about the rates is I can spin an argument for why the rates should be 99%. And an argument for why the rates should be 0%. It just depends how you look at it. So the 99% is what I wrote in this article. The reality is, is that. People want apps on their phones. The phones are the most important devices to them. Apple controls that. And because that Apple, it's like Facebook in their advertising, right? If Facebook finds you a customer, you're never going to have found otherwise. What's the limit on what they can charge for that? Every cent that you make is additive, right?

• 28:18Ben Thompson?

  Now, it's not quite the case with, with apps because you, but imagine like, cause you could go otherwise. You know, so it's not a perfect scenario, but by and large, and this was the point of the article. The power of owning all the users on a platform that is essential is you can do what you want and developers will abide by. They'll complain, but they'll abide by it because that's how powerful platforms are. So that's the argument for the one side. The argument for the opposite side, why it would be zero, is that suppose Apple were not allowed to charge anything for its intellectual property. The market clearing price would be zero. They would still offer it because it's so important to have apps collectively.

• 29:01Ben Thompson?

  Even if you have power over any one individual app, having apps is such an essential ingredient for a platform. That if Apple were forced to, they would still make APIs and documentation and all these sorts of things to have. They would be like Windows back in the day. And it's funny, everyone points to Windows as, see, that's how you should do it. Honestly, if anyone knows anything about Windows, it's, I think it's probably the case. They just didn't think of being able to charge this much. Or was it possible in a world when they're, you, you bought, you know, applications on CD-ROMs or, right? Or discs, yeah, back in the day. And so the, the, the reality is the market clearing price is zero. So this is my whole problem. This is the fundamental like logical flaw in the judge's case. She's just asserting it's super competitive.

• 29:48Ben Thompson?

  Based on nothing, because the the answer is actually the the correct rate is either 99.9 or 0. Any point in between is arbitrary. 30% is arbitrary. Any like she's mad at Apple doing a a post hoc valuation of their IP. Any valuation is post hoc because it's just like that's just the like there's some aspect of this decision that is not in touch with reality that speaks to the lack of an appropriate law in this case. This is my point all along. The laws we have don't address this as clearly as they could. That's why I conclude by saying, look, it's actually pretty straightforward. If you have a platform, and I think you get

• 30:32Ben Thompson?

  to provide a platform pretty tightly, you have a high number, which means it's consumer, it's not enterprise, because the enterprise, it's a much more sophisticated buyers and users and much more viable to do other things. If you have a platform, you bring two fundamental American truisms, and I threw in this extra one along the way. The platform doesn't get to interfere with your commerce, and they don't get to interfere with your speech. Like, which who's can be opposed to that, right? Apple doesn't get to kick kick apps off because of what content they have or don't have. And Apple doesn't get to kick apps off because what they do on their websites between two consenting adults, right?

• 31:08Andrew Sharp?

  I was gonna say, so you may run into some issues where they have traditionally not been fans of adult content on Apple.

• 31:15Ben Thompson?

  There's a case with the judge's opinion. She's 100% morally right, but it's kind of legal nonsense and economic nonsense. You just stated blindly, it's super competitive. Super competitive based on what?

• 31:26Andrew Sharp?

  Well, if there would be based on if there were other app stores available, they wouldn't be charging 30%. And also, I think that the rational economic outcome, like Spotify, for instance, ultimately, this is a redistribution of wealth from Apple to Spotify. But Spotify is the one who is providing the value to users. Apple is not providing 30% of value to users for every single subscription.

• 31:55Ben Thompson?

  I completely agree. For just to be super clear, I I think I've It's so important that's when I say it again and again, because there's such emotional resonance to this bit, particularly amongst developers. I completely agree. I've been objecting to this for years and years and years. I hope my stripes in this case are sort of well established. But at the end of the day, Spotify is not going to pull their app from Apple, say, actually Spotify is only available on Android. Or we're going to build our own Spotify phone. So that's how we're going to compete. Not gonna like.

• 32:25Andrew Sharp?

  And that's fair. I just, I only raised that to say that that would be my response if a judge asked me, so is this super competitive? Um, and we're saying supra, not super.

• 32:36Ben Thompson?

  Yes. Well, you just said super.

• 32:37Andrew Sharp?

  I would, I would invoke it. Um, yes, I need to enunciate better. But yes, that's what I would invoke. And ultimately, I think this is not the optimal economic arrangement. But Apple is a platform, makes great products and is able to dictate terms in perpetuity until Congress intervenes.

• 32:57Ben Thompson?

  Yeah. And by the way, the judge's solution is the solution. It allow links out to the web. Like, the, the problem is again, I, I, I think the, Apple did fire, file their both an appeal and an, and, and ask for a stay. We'll see what happens. I think, again, I'm, I'm not going to, I think 50 50 chance, maybe 55 45 to, to actually win. But if they win, or even if they don't win, I think a law here is actually, I'm not one to call for laws. I'm not one to call for regulations. There's aspects of the DMA that do get at this. The DMA is just, it's way too complicated and way too in-depth and it tries to police too many things.

• 33:37Ben Thompson?

  The fact of the matter, everything is a trade-off. I am someone that is hesitant about regulation. I, I want to open up for innovation, but I, there's a bit where like, infrastructure is important. And, and platforms are infrastructure. And at the end of the day.

• 33:58Ben Thompson?

  If we want innovation, if we want creative outcomes, then, sorry, Apple, congratulations on your success. You've made a lot of money. I, again, completely disagree with you that you should be forced to open up anything on your phone that you don't want to, including in-app purchase. But the idea you can police what developers say as a price to be on an essential platform is bad economically, it's fundamentally un-American.

• 34:24Andrew Sharp?

  There you go. Well, and as you noted, on Wednesday night, Mark Gurman reported that Apple has filed a motion for a pause on last week's ruling on the App Store, that it must stop collecting payments made on the outside web. And so this journey is going to continue for years to come. Good news for everybody, we're never going to stop talking about the App Store here on Sharp Tech. But on that note, I want to stick with Bloomberg and a story that is also from Mark Gurman and also from Wednesday. Busy day for Gurman. He wrote, "Apple is, quote, actively looking at," end quote, "revamping the Safari web

• 35:05Andrew Sharp?

  browser on its devices to focus on AI-powered search engines. A seismic shift for the industry hastened by the potential end of a longtime partnership with Google." Eddie Q., Apple's Senior Vice President of Services, made the disclosure Wednesday during his testimony in the remedies phase of USV Google. Q. said he believes that AI search providers, including OpenAI, Perplexity AI, Inc., and Anthropic PBC, will eventually replace standard search engines like Alphabet's Google. He said he believes Apple will bring those options to Safari in the future. "Prior to AI, my feeling around this was, none of the others were valid choices.

• 35:48Andrew Sharp?

  I think today," he said, "there is much greater potential because there are new entrants attacking the problem in a different way." And not included in that excerpt was a note from Q. that in April, searches on Safari dipped for the first time in two decades. So clearly, some user behavior has already begun to shift. What do you make of this discussion and what it could mean for Google?

• 36:15Ben Thompson?

  Well, the incentives here are important to note, which is Apple gets 20 to 25 billion dollars, or whatever the number is, of pure profit from Google based on searches in Safari. And it's, I mean, it's pretty remarkable. Apple, Apple somehow, as an integrated device manufacturer, has made itself susceptible to AI disruption. I mean, there, there, there is a bit here where Apple has squeezed the juice out of every aspect of their business to such an extreme degree that they're actually way more brittle and at risk than they should be. Like, why should Apple be having a quarter of their profit coming from Google? Like,

• 36:58Ben Thompson?

  like, why should Apple be, be so dependent on China? Why should Apple be so, be so locked down on this App Store stuff and not willing to give an inch? There, this is maybe another way of looking at the Cook critique, which is that this company has resolutely optimized to an unhealthy degree, such that they're, they're headed for, I made an article years ago, talking about this, that, you know, the, I think I, I quoted the Aesop's parable about the reed and the oak tree. And then the oak tree mocking the reed that bows before the wind and all these sorts of pieces. And then, you know, the storm comes, the oak

• 37:39Ben Thompson?

  tree's uprooted, the reed is still there. Tim Cook has destroyed Apple's resilience. And, and in multiple areas. And this is a good example. Of course, Eddie Q is up there saying, oh yeah, Google's in big trouble because under, like, we need,

• 37:53Andrew Sharp?

  We need this money, man.

• 37:55Ben Thompson?

  That's right. We're, we're extremely dependent on, on this money for our profit and ultimately our stock price.

• 38:01Andrew Sharp?

  And we should clarify, the, the incentive there, Google is trying to argue that the search market is more competitive than ever, and therefore the claims of its monopolistic dominance are overstated. And so Apple is an interested party trying to help Google sell that story and perhaps not.

• 38:18Ben Thompson?

  And the way to help them is to take Google's stock price by like 10% or whatever, by revealing what we've been Predicting and talking about for years is happening like search volume going down is a big deal. Like because it search is a service. It's something you do. So even if like say iPhone sales flat line because the the upgrade cycle is elongated like a favorite word of analysts. Because people don't buy phones more frequently or they buy used phones or they're still using their phones every day. And so should be searching every day. So the fact it search volume diminishing is not because people are using their phones less. It's because they're using something else on their phones. And you know, and the thing with AI

• 39:02Ben Thompson?

  that that should is is so compelling as a product is anyone who seriously uses AI only uses it more and more. It's a one way ratchet. They they don't start use. It's not like Instagram where you get super into it. Then you're like, why am I wasting hours of my life? And you just stop. You don't just stop. AI is it's AI is much closer to the personal computer or the phone than it is to an application. It's like it's like a level down in the Maslow hierarchy stack or a level up or whatever direction it is. They're like, and and so this is only going to go in one direction. Now, for now, Google still retains commercial queries. So the value of those searches are still high.

• 39:45Ben Thompson?

  I would bet that Apple's payments are not diminishing because they're paid on a performance basis. And so the the you know, so they're probably still fine financially. But the reason the the market reacts to this is theoretically, this should be happening. And boom, here's a proof point. And and and there you go.

• 40:03Andrew Sharp?

  Yeah, I mean, it also makes me wonder, is the end of the Google, Apple search payments default placement arrangement? Is that a bigger problem for Google or Apple? Because removing Google as the default on iPhones could really, really accelerate this process and make it a lot realer a lot sooner. And so I think that's part of what people were reacting to on Wednesday is like, wow, okay. So if Apple is going to make it easier to just search through Safari on Chat GPT or perplexity or any of these other options. I mean overnight, this could change. Uh, it feels like an asteroid that is now much, much closer to Google search.

• 40:44Ben Thompson?

  You've always been able to use a different search engine. Like there's five or no, the, the, the selection list is limited by apples, but, but you've been able to change it. Most people don't because Google is good enough. I think your point is if you can change it to one that's already better, maybe more users will do it. But this whole thing has always been about defaults. My initial answer to your question is it hurts Apple more like a quarter of your profit disappearing is a quarter of your profit disappearing. Like, that's just kind of hard to paper over. It does, it is, you can make the case that Google at any other time until now, this would have been a non-event. Because people would just reselect Google. Fine, we have to have a search engine choice screen. Now, if we didn't, it might be different.

• 41:29Ben Thompson?

  But the fact it might be different, kind of speaks to maybe this judgment is not necessary because there actually is competition. It's like Facebook dominates social media. It's like, well, social media doesn't really matter anymore. It's about user generated content and Tik Tok's taking a big bite out of them. And if you zoom out even larger, this is the general critique, which is, is the heavy handed hand of the court necessary for a five tier interognum of dominance? When actually the evidence is it keeps changing and keeps going away. Again, I think for platforms, probably yes. But when you get to some of these area questions, it's, it's a little fuzzier.

• 42:11Andrew Sharp?

  Yeah, I mean, it's interesting because I would go the other direction and say that this is evidence of why the verdict was important. And ending these default payments is important because right now, Apple may be forced to integrate with chat GPT or Claude or whatever it may be perplexity. But if not for this verdict, Apple would have every incentive to continue working with Google. Because Google monetizes much better than any of the AI options in the market. And it would Just continue on with most iPhone users like I'm I feel bad admitting this on the podcast because you were very judgmental of another friend who's not really availing himself of AI

• 42:56Andrew Sharp?

  search capabilities. But I mean, I don't have that much firsthand experience with using chat GPT for search because I use Google and Safari for 95% of my search needs. And that's how most people behave and Apple would be happy to keep that going in perpetuity and continue to make $20 billion a year. And in a couple of years, I'm sure it'll be $25 billion a year if not for the court intervening here and saying this payment is illegal, given Google's market power, and it's time to go a different direction. Like, I think we're getting exactly the sort of intervention at the perfect time that the body of antitrust law envisions.

• 43:41Ben Thompson?

  Like I said, your movement ends in authoritarianism in the end because people don't do what you want them to do. You can set another default browser, by the way, which you couldn't do previously. So that is an important change. You can set a different search engine. You can install the chat GPT app. You're just mad that people don't do what you want them to do. So like, we're talking about defaults here. Like, no, I'm being a little antagonistic.

• 44:07Andrew Sharp?

  No, but I'm going back. I mean, the reason the default is more that conversation is more compelling now than it was a couple of years ago is because there actually are alternatives to Google that are more compelling in a lot of people's eyes.

• 44:19Ben Thompson?

  And you're mad that people won't go out and find them and use them. Again, this is more of a less of a legal argument and more of a this just rubs me the wrong way. Like, people being mad about other people not doing the thing they want them to do. Like, and that's, that's honestly sort of a motivation that I'm just instinctually opposed to.

• 44:40Andrew Sharp?

  That's fair. Well, Google is headed for some turbulent waters over the next couple of years, if in fact, Apple ends up making this shift at some point. And it's interesting.

• 44:53Ben Thompson?

  Well, but that's the thing. Apple has no interest in making this shift because they make so much money. This is a whole another point. It's not in Apple's interest. To, I mean, Apple is a kind of a paternalistic company also. They want, they like, we know what's better for you than otherwise. They're not going to give you the best experience. They're going to give you the experience that monetizes the best. Like, like, again, because they've over optimized themselves into this corner where, yeah, they're up there like saying, please Google, hold on. Figure AI search overviews. Do a good job. We need the money. We, we're dependent on the money now.

• 45:25Andrew Sharp?

  Please judge. The, the market is more competitive than ever in 2025. Yes. Well, one final question on Google. Would it be fair to say that Google is still well positioned for the future, even if search is disrupted? Because like they still have Google Cloud, they've got YouTube, they've got infrastructure advantages in AI and Gemini. I mean, like, how panicked should people actually be in the wake of these developments?

• 45:50Ben Thompson?

  I mean, I don't, I don't know. I, Google, it's really hard to evaluate. I mean, the, like I said, they still dominate commercial queries. They still, like, there's a lot of infrastructure that goes into ads that is hard and difficult to build. They, you know, they, it works very well. Their CPMs are going up. There, there, there's a flight to safety aspect to them. There's a bit where can, you know, we critique the sort of users have to click on the ads route, but there's also some value in that. Can you ever actually deliver a compelling ad experience in, in a chatbot? What do the alternatives look like? And AI search overviews, by the way, are the most used AI product in the world.

• 46:28Ben Thompson?

  Which is kind of like, you don't think about it that way, but more people are using generative AI on Google than on any other platform. And they claim that they have ads in there. They claim they monetize as well as search. So there's, there's reason to believe that they could, and just as a rule of thumb, these things hold on longer than you think. And new things tend to layer on top as opposed to completely replace them. On the other hand, search on Google sucks compared to chat GPT for a lot of things. The, the, it is interesting though, because there's a bit with chat GPT where it gives you, like chat GPT.

• 47:07Ben Thompson?

  It's kind of like the wire cutter phenomena where like the wire cutter, the review site that New York Times bought, and it's like.

• 47:16Ben Thompson?

  Is this actually the best for me? Or is it sufficiently convenient to just go there that I'm just gonna sort of go with it?

• 47:22Andrew Sharp?

  Yeah.

• 47:22Ben Thompson?

  Right?

• 47:23Andrew Sharp?

  Well presented.

• 47:23Ben Thompson?

  Yeah, no, exactly. Like, uh, maybe, maybe actually ChatGPT could be better if you really wanted to understand your preferences. Like, I hate review sites by and large because, um, oh, how do I say this? This is gonna sound terrible. They overindex on price. And they're like, it's like, if I'm buying this particular thing.

• 47:42Andrew Sharp?

  Show me the best product. I don't care how much it costs.

• 47:46Ben Thompson?

  Let me do the value perspective on is this worth XYZ? Like, I actually want an absolute quality evaluation. So maybe I could, I should put that in my prompt for ChatGPT. Like, like, no, I want to know the best with a list of prices and I will say, yeah, that's way too expensive.

• 48:02Andrew Sharp?

  You know what? I'll go for XYZ. I wish I could make fun of you for being Marie Antoinette on the other line here. But I actually wholeheartedly agree because there's nothing worse than going to a wire cutter type article and getting the cheaper option because they oversell it essentially. And then realizing this kind of sucks. I should have gotten the more expensive option and then having to spend that much more money at the end of the whole process. Just give me the best product.

• 48:33Ben Thompson?

  Or just live with the fact you know you don't have what, you don't have what you actually wanted.

• 48:37Andrew Sharp?

  Yes, exactly.

• 48:37Ben Thompson?

  It's so particular, right? There's some products I don't really care. I just need something that's functional. There's other products that like, like, I have thousands of dollars of, of audio equipment here. Like, I, you know, I go out, I buy a thousand, I have $2,000 mics, a travel one and, and one here. I have the boat, a very high-end mic interface. And you know what? It's cheap relative to its importance to, to my work and career. If I go to a site and it's like, well, this is, this is actually your best, best option because, because of some sort of value. That doesn't resonate with me. That's not what I need. And so, yes, uh, but yeah, we are, this is a, this is an aside, uh, that's making us sound.

• 49:21Andrew Sharp?

  Couple of podcasters here talking shop, you know, talking hardware here on the podcast. Maybe we could be a reviewer at some point.

• 49:27Ben Thompson?

  Well, we'll throw Bill Bishop under the bus, right? Like Bill Bishop, very expressive, moves around. And so we're like, you know, you know, we need, you know, we added up getting him a headset mic where he, so the mic's always in front of him.

• 49:40Andrew Sharp?

  It follows him, right?

• 49:41Ben Thompson?

  You get some diminishment in quality, but it's better than sort of it was. I remember going through this whole thing, like all the recommendations are for these like low end one, no, we got like the same mics they use like NFL broadcasts, right? Like, it's like, like, it's a podcast, you're selling for money. I'm going to invest to get the best thing. All these reviews are, so what I had to do was go to an audio professional, explain the situation. And then he's like, yeah, this is what you need and you need this interface box and you need X, Y, Z, da, da, da, da. And it's great, works great, you know, no, no, no complaints from, from, from the editor or anyone else about the sound quality now. Like the, it's interesting. I'm actually thinking about loud here.

• 50:21Ben Thompson?

  This is probably, maybe this is actually bad for Google because this is something if feels like the, the AI should be better at, no, Google should in theory. Like this kind of gets back to the meta AI and the personalizing AI bit. I, I would like Google to gather more information on me. I would like it to track my purchasing habits. And start to build this sense of what my priorities are, what I care about. If anything, we're, we're, and this goes back to one of my Apple critiques, we're entering an era where privacy is just a massive detriment to the user experience. I want my AI to know more about me.

• 51:02Ben Thompson?

  This idea that I was just pitching about, oh, go into my custom prompt and tell chat GPT to focus the next one. Why do I have to do that? You're, you should be.

• 51:09Andrew Sharp?

  It should just know.

• 51:10Ben Thompson?

  Yeah, no, exactly.

• 51:12Andrew Sharp?

  Yes, um, well, I have breaking news.

• 51:14Ben Thompson?

  Off to the gate next.

• 51:17Andrew Sharp?

  I have breaking news here on the podcast. Have you seen the Celtics score?

• 51:20Ben Thompson?

  I have, and it's been hard for me to focus for the last thirty minutes.

• 51:23Andrew Sharp?

  Oh, my God.

• 51:24Ben Thompson?

  At the end.

• 51:24Andrew Sharp?

  Just magnificent. I love to see it, even though I didn't literally see it. I will be watching it the second we finish.

• 51:32Ben Thompson?

  I did turn on a recording because I'm like, I find the Celtics winning depressing.

• 51:38Andrew Sharp?

  Watch that.

• 51:39Ben Thompson?

  Yeah, so no, fortunately, I have means to access your recordings. I'll be downloading.

• 51:44Andrew Sharp?

  Oh, my God.

• 51:46Ben Thompson?

  I definitely enjoy watching the Celtics lose. I can tell you that.

• 51:49Andrew Sharp?

  And I'm going to be taking credit for the.

• 51:50Ben Thompson?

  I lied. You know what? Total lie. I'm not cheering for Denver. I'm cheering for a Celtics loss first and foremost.

• 51:54Andrew Sharp?

  Whoever the Celtics are playing. Go Knicks. Absolutely. Let's go Knicks. All right. Final segment here. I got to read you six quotes from a New York Magazine article on ChatGPT's impact on colleges. The headline was, "Everyone is cheating their way through college." Quote number one, "AI's takeover is a full-blown existential crisis for higher education." Quote number two, "College is just how well I can use ChatGPT at this point." Quote number three, "I think we are years or months probably away from a world where nobody thinks using AI for homework is considered cheating."

• 52:35Andrew Sharp?

  Four, "It isn't as if cheating is new, but now, as one student put it, the ceiling has been blown off." "Who could resist a tool that makes every assignment easier with seemingly no consequences?" Five, "Massive numbers of students are going to emerge from university with degrees and into the workforce who are essentially illiterate." "The humanities and writing in particular are quickly becoming an anachronistic art elective like basket weaving." And then six, "Every time I talk to a colleague about this," this is a professor speaking, "the same thing comes up, retirement." "When can I retire? When can I get out of this?" That's what we're all thinking right now.

• 53:20Andrew Sharp?

  So Ben, I sent you this article before we came on to record. It went minorly viral on Wednesday.

• 53:26Ben Thompson?

  Hilarious article.

• 53:28Andrew Sharp?

  "As a parent of a child who's going to be attending college in the fall, what do you think of all this? Is it a problem? And if so, what do the solutions look like?"

• 53:36Ben Thompson?

  Well, um, you know, if I could pat myself on the back, uh, I'm looking at this article on Monday, December 5th, 2022. I believe that ChatGPT came out on a Wednesday, so I, you know, I didn't violate my, my, my general don't write on Friday. I waited until the following Monday. And my article is entitled AI homework. And my way to write about ChatGPT from day one was to start with homework and to sort of expand from there about how this is going to change, change. I had completely forgotten that, but yes. Um, so, uh, Being right points for you. Yes, thank you. A big victory lap, two and a half year victory lap. I appreciate it.

• 54:18Ben Thompson?

  I mean, well, this is like, this is the challenge, right? This was eminently foreseeable and it's funny to see people worrying about it now in 2025. Um, I think zooming out, by and large, what things like this, the, the, things like this are less causal than they are revelatory. And what I mean is ChatGPT is not causing college to be worthless. It's revealing how worthless the vast majority of college is. Hmm. Good take. And I think like you, you just read this article, so much of this sort of comes through it.

• 54:59Ben Thompson?

  The unfortunate reality is, I mean, one of the most hilarious things in here was the, I assume, millennial author worried about Gen Z not knowing what's true and what's not. When this entire article was caked in these sort of embrace of these myths, uh, like, for example, everyone should go to college, you know, everyone is equally capable, you know, like this is just dripping with sort of a blank slate, this sort of ideology that, you know, if, if everyone, which under, which has tremendous consequences, like that's a problem with myths when you act on them. Why do we end up with this hilariously distorting market of

• 55:44Ben Thompson?

  student loans and all these bits and pieces? Of we're gonna immiserate all these people and oh, by the way, now there's all we're gonna make it so they can't declare bankruptcy to get out of it. And then we're gonna end up with degree like all these knock on terrible effects are all downstream from saying, if we just get people college degrees, they'll magically make more money. Like, like, no, actually, the the premium for a valid college degree is still significant. So of course I'm gonna send my kids to college. I'm not going all the way like I think people go too far with this. They start highlighting some of these issues with college like I would never send my kid to college like no, you're being a moron. Of course you send your kid to college. Like, the reality is, is it is an essential credential that now it's bad. We've extended the credential from eighteen. The credential used to be like twelve, right?

• 56:29Ben Thompson?

  Now it's that was like eighteen. You need to have a high school degree. Now it's twenty two. You have to have a college degree. If you're like, oh, what about fertility? So well, maybe if you're extending the credential to be a functioning person in society or not a functioning person, but to make a X amount of money in society, you're pushing it up to twenty two and in making it further and now you need a graduate. Like you need a graduate degree to like be a librarian or something, right? Now it's up to twenty four or twenty five. Like there's all these knock on effects that are downstream from mixing up cause and effect. The reality is, is that college by and large is it's a filtering mechanism to see if people sufficiently have their shit together to get a degree that actually isn't that hard because we've dumbed down and introduced all these majors.

• 57:14Ben Thompson?

  I mean, it's funny. I was I've embraced all these myths. I mentioned last episode that I was a political science major. Dumb major, to be clear. I was in it because I loved it. I thought it was super interesting.

• 57:24Andrew Sharp?

  Really, really fun class. I really enjoy my political science classes.

• 57:29Ben Thompson?

  Well, the great thing about it was I realized it was like a cheat code. Almost every class I took my last two years were these seminars. And like I actually organized a few seminars, like I went to professors that I knew, like I like I got a group of people that would like to do this. Can we spin up a seminar? It'd be like five people were reading like I did this one about like the the philosophy of education. And like we're in there like five people like reading like Plato or whatever and like having like these two hour long debates about it. Like I love talking and debating like it was freaking awesome. My last two years were were amazing in college. The reality is that. Well, I maximized it. I'm not sure what political science is one of the largest majors at the University of Wisconsin, and not because everyone wants to sit around and debate

• 58:14Ben Thompson?

  the philosophy of education about Plato. It's because it's easy, okay? I freely admit that, right? But that kind of speaks to it, right? College back in the day, not, you know, like hundreds of years ago, was for a very small number of people that were intrinsically motivated to discover and find all these things. And by the way, if you still have that motivation, AI is amazing. It actually lets you know more. I like, I started like 15 AI chats yesterday about basically a gazillion different things, because why not? Like, I was the heaviest Google user in the world. Like, when I'm in a conversation with someone and some question comes up about some fact in the world and no one knows the answer, I can't handle it.

• 58:59Ben Thompson?

  I immediately go and look it up. And then people are like, wow, Ben, why do you know so many things? Because I'm a freaking maniac that every time I encounter something I don't know, I look it up and then I have a good memory, so I sort of retain it, keep it in. And oh, by the way, like, I love to argue and debate about everything. Like, like, college for me was amazing, is this incredible experience. And AI only enhances that. It gives me agency to know more, to dive deeper, to see all these sorts of things. And, and the reality is, is that most, that's not why most people are at college. And this isn't a value judgment. Like, there's lots of things to be done in the world and lots of roles and things to play that don't entail debating the philosophy of education and reading Plato.

• 59:40Ben Thompson?

  Like, that's, that, and, but the problem is, as a society, we've instituted this, actually, you need a college degree as a test of conscientiousness and basic intelligence. And we, the way we got here, there's some Supreme Court decisions, there's this case called Duke versus Griggs, like disparate income, like, you can't, employers can't give, like, tests to, to employees or else they'll get sued into oblivion, basically. And so they basically outsourced filtering to colleges. But because people who pass the filter make more money, it got interpreted as just get more people shoved through the filter. And what, what AI is doing is exposing this farce, exposing how we've flipped cause and effect, how we've gotten this all backwards.

• 1:00:24Ben Thompson?

  So you have people going in there and, and they go in there and they, they cheat, cheat, whatever you want to call it, on all the papers. Like there was, there was one in here about someone like the history of jazz music, blah, blah. I hate to break it to you, professor, but people are in that class not because they love music. They're in that class because they have some stupid requirement to take some sort of-

• 1:00:45Andrew Sharp?

  And it sounds like an easy A. Let's just call it what it is.

• 1:00:48Ben Thompson?

  Yeah, I took a history of music, something, I loved it. It was a great class. It was also ridiculously easy. We sat around and listened to music and like wrote thoughts about it, right? Like it was, it was all good. But like there's technology and you see this again and again, it's revelatory, right? And, and we, we were just talking, what podcast were we talking about this? Just a little bit ago. What, what, the competition bit, right? A big problem people have with tech is actually it engenders perfect competition and people don't like that, right? What is revealed is that there's actually only like 10 sports columnists in the US that are worth reading, right? The fact every city used to have one was not because there were a lot of great sports columnists because people were geographically constrained to their local newspaper and every local newspaper had a columnist.

• 1:01:33Ben Thompson?

  And as soon as people could read the whole internet, guess what? They, they all flocked to Bill Simmons.

• 1:01:37Andrew Sharp?

  Yeah.

• 1:01:37Ben Thompson?

  A similar dynamic is happening here. AI is not ruining college. College was ruined and AI is exposing the extent of the rot.

• 1:01:46Andrew Sharp?

  So I like that take. I do think it's a little bit more complicated than that. I mean, first of all, what I don't understand, if cheating is the concern, this is probably because I'm old and my last academic experience was law school where basically every class is just a series of lectures and then you have a written in-class exam at the end of the course. I don't know why that model is supposedly unavailable to professors today, like-

• 1:02:15Ben Thompson?

  Yeah. No, I have never understood the whole take home exam thing in general, even when I was in college 25 years ago.

• 1:02:21Andrew Sharp?

  Yeah.

• 1:02:22Ben Thompson?

  I'm like, like- I mean, on one hand, it is, there's an aspect of this that is sad, to be clear. I'm just coming out guns blazing because I feel like I had a hot take and I really wanted to like, like, fully deliver it.

• 1:02:33Andrew Sharp?

  And I'm just noting for the record, I think it's more complicated. I enjoy the guns blazing.

• 1:02:37Ben Thompson?

  I agree, I do. I just sort of want to cook today, but there's, there is a, even going back then, it was basically on the honor system that you're going to do your take a exam according to the parameters that the professor delivered and do it. And it mostly worked. And one of the sad things about our society is the extent to which stuff like that doesn't work. We've talked about this in all sorts of arenas, right? The, as you lose societally accepted mores and taboos, you're forced to introduce hard laws. And when you have hard laws, everything, you're introducing red tape and all these sorts of issues. And there's a massive loss that comes from that. And so, yes, one of the answers is go back to in-class, you know, write down your answer.

• 1:03:21Andrew Sharp?

  Totally. Like, if the concern is purely rooted in academic integrity, and again, I'm probably dating myself here, but just, I took a lot of exams in blue books and it doesn't look like it should be that hard.

• 1:03:32Ben Thompson?

  Well, and by the way, as long as I'm on my soapbox, you know, the taking notes by hand offers much better retention than trying to take notes on a computer. I actually think like, look, like, college, I'll let you be paternalistic. Ban laptops in the classroom. Like, make people write it down. You're actually doing them a favor. Um, I'm actually, you know, I'm fine with that to an extent, but there is a bit where, if you think about it from an employer perspective, if employers are looking at colleges as certification machines, guess what employers want their employees to do?

• 1:04:07Andrew Sharp?

  Know how to use.

• 1:04:09Ben Thompson?

  Know how to use AI. Colleges are actually doing their job, right? They're like, how can you get through all this busy work? Busy work which accumulates because we need more and more laws, because we've lost society mores and taboos that control people's behavior. Like, as a society, we're eliminating judgment from people anyway. So, so there's some aspect where actually this is totally normal and arguably even appropriate. And like, the guy they opened with, the guy who's making all the cheating apps and things along those lines, he's like, he's not going to go work for a big company or something. He's like, yeah, of course he's not. But also, Big companies are liars too. They're like, we want you, we want entrepreneurial students. We want people. No, they don't. They want cogs in the machine.

• 1:04:51Ben Thompson?

  Like, like, like, there's a reason, like, like, by the way, I did that job at Microsoft. I took the initiative to build that deck. I didn't get a single promotion at Microsoft. Like, whi- which really irked me at the time, but in retrospect, I was like- You get it. Yeah, I get it. Yeah, I went to promote, I was, I was, you know, surly. I, I had little patience for people that didn't get it. Really difficult to work with, yeah. There's a bit where me making that deck was so out of line because it was like a deck that someone way higher than me in the stack had made. It was just so good that it got adopted anyway. I had an amazing manager who really, I think, shielded me and protected me from this stuff. But also, to get buy-in for a promotion, he had to convince his other peer groups, and he was not able to do that.

• 1:05:33Ben Thompson?

  So, like, the, like, and like, yeah, like, a- all the qualities that made me a poor corporate cog at Microsoft are the exact qualities that enable me to send this podcast, have tens of thousands of listeners, and cook on here and say this is all pointless and worthless, right? I don't care what people think. I don't care what they say. I'm gonna go out, do my own thing. Uh, more power to this league guy. He's totally unsuited for college anyway. And, and, and there's a bit where the returns to people like that, questionable though their morals may be, are, are only getting larger. The internet was already step one. People like you and I could go out and just put a podcast out there, and because there's, it's perfect competition, our willingness to compete and ability to succeed was rewarded.

• 1:06:16Ben Thompson?

  And, and we've talked about the returns to HCS coming from AI. It's only going to get larger. And, and it's going to be tremendously disruptive. And there is a bit that's sad about this. Like, we romanticize the college experience. I think fondly back to those seminars that I sat in and debating things back and forth. We talk about, oh, this is a dorm room topic that, you know, we're just gonna sort of debate, sort of back and forth. Absolutely, man. Common room. It's sad to see that go, but one, one thing that's important to keep in mind, and this is gonna be a really hard thing to deal with. I think a problem societally generally is-

• 1:06:54Ben Thompson?

  We have a romantic view of humanity that doesn't match reality. Which is, for example, there's a lot of crappy jobs in the world that need to be done. And people do those jobs not because it's their calling, or they're, you know, they have their dream. It's because they need money. And that's the job, they, that's a job they can get that puts food on the table. If they don't have the job, they're not going to eat.

• 1:07:18Andrew Sharp?

  Yeah.

• 1:07:18Ben Thompson?

  And that's very difficult to think about. Because it, it seems vaguely or explicitly wrong. Of course, people should be able to eat. Like, people have a right to eat. They have a right to housing. They have a right to healthcare, all these sorts of things. And again, this is a dorm room discussion to a certain extent. But we do ourselves a disfavor in thinking about the reality of humanity by not appreciating the extent to which people do stuff they don't want to do because they have no choice. And, and there's an aspect of this college discussion that is sort of along similar lines. There's a lot of professors here that fooled themselves into students doing work for their classes because they were interested in learning. Actually, you, you have a faulty view of human nature.

• 1:08:03Andrew Sharp?

  It was always a chase to a credential. Yeah, no, that makes sense. We're not going to close out the podcast by quoting Caddyshack. The world needs ditch diggers too. But I do want to read this professor. He says, Williams knew most of the students in this general education class were not destined to be writers, but he thought the work of getting from a blank page to a few semi coherent pages was, above all else, a lesson in effort. In that sense, most of his students utterly failed. They're using AI because it's a simple solution and it's an easy way for them not to put in time writing essays. And I get it because I hated writing essays too when I was in school. But now, whenever they encounter a little bit of difficulty, instead of fighting their

• 1:08:46Andrew Sharp?

  way through that and growing from it, they retreat to something that makes it a lot easier for them. I just want to say that that's a real concern. And if people are abdicating their critical thinking and entrusting ChatGPT to do it for them, I don't know where that leaves us as a society. In 10 or 15 years, I'm a

• 1:09:05Ben Thompson?

  Well, the other hilarious, there's a, again, there's a lot of very funny things.

• 1:09:08Andrew Sharp?

  People should read the article. It's a really entertaining read.

• 1:09:11Ben Thompson?

  One was the girl who's like, yeah, I have so little time to do my homework because I spend 10 hours a day on TikTok.

• 1:09:17Andrew Sharp?

  Hours and hours until my eyes start hurting, she says, but chat GPT makes it easy to write an essay in two hours. Yeah, that's the concern. And, you know, as someone who

• 1:09:28Ben Thompson?

  But that exists, right? Like, again, I don't know that, I don't know that we have the answer to this. These are real concerns. Like, you go back, you know, to use a literary reference, the movie Up, or not Up, I always get to admit, Wally. I always get Wally and Up mixed up because Wally, it's a spaceship, it's up, right? The Wally, like this world of people, you know, just sitting in their chairs endlessly amusing themselves, seems pretty prescient.

• 1:09:56Andrew Sharp?

  And you know what, though? You also, you talk about the value of these tools. You put in a good 20 years learning in analog fashion, you know? You were taking notes by hand and you were reading real books and writing real essays. And so that lays a foundation that I think makes all these tools a lot more valuable. And if people don't have that, I wonder where that leads.

• 1:10:21Ben Thompson?

  It leads to them sitting on their couch surfing TikTok and vaguely depressed about their life, but drowning it in social media.

• 1:10:28Andrew Sharp?

  Well, hey, there was that one kid who launched his own cheating app business. So it's working out for him.

• 1:10:34Ben Thompson?

  But that kid's fine. No, I know, but this is the broader concern is we're barreling towards this reality of the vast majority of people being vaguely dissatisfied with their life, but having enough to eat, having a roof over their heads and entertainment that sort of drowns out the, drowns out the vacancy in their lives.

• 1:10:54Ben Thompson?

  And while some smaller number of people

• 1:10:58Ben Thompson?

  Because have the agency and initiative to actually take advantage of this stuff and go out and do things and do far more things than they could otherwise. Th- this is like, it's a real, again, this is the dorm room question, is that a good thing? If you measure world net GDP, probably yes, because the, the, the truly, the, the talented people with agency are going to get accentuated or amplified to such a dramatically greater effect. In many respects, when I talked about COGS and the corporate machine, corporate machines are there to amplify the person at the top, right? Apple was a Formula One car built around Steve Jobs. Nvidia is a Formula One car built around Jensen, Jensen Huang.

• 1:11:41Ben Thompson?

  They are there to enact and articulate their vision. What if we could do that for more people without all the difficulty of having tens of thousands of employees, right? Like, i- i- it's like the trade debate. Like, you measure GDP because trade makes everyone richer when you measure it as an average. And then the question is, well, what about the experience of someone in the Rust Belt? Right? Like, like, like, i- is there something that's not being measured that's being lost? And this is the concern about these sorts of things. Maybe on average, from a purely economic lens, we're going to be better off with all

• 1:12:23Ben Thompson?

  these tools, but the reality of humanity is, is a huge number of folks are not just consigned, they're self-consigning themselves to a world of being cattle. And like, that's pretty depressing, but then again, it's like the aggregator versus platform argument. They're doing it themselves. They're choosing to watch TikTok for 10 hours a day and, and then using ChatGPT to write their answers.

• 1:12:46Andrew Sharp?

  Yeah. Well, and look, I, final thought here, if this is, if students aren't learning how to think because they are abdicating all of the critical thinking to ChatGPT.

• 1:12:58Ben Thompson?

  Did they ever know how to think in the first place?

• 1:13:00Andrew Sharp?

  Well, I mean, I don't, I like to think I learned along the way. I don't really romanticize my college experience.

• 1:13:05Ben Thompson?

  I know, but you have initiative, right? Like, the reality is-

• 1:13:08Andrew Sharp?

  I didn't in college, I'll tell you that much, but it emerged along the way.

• 1:13:12Ben Thompson?

  I mean, I don't know, you look back, you, you, you went- I don't know.

• 1:13:15Andrew Sharp?

  I got good grades in college, but I mean, college is very easy. That's one of the reasons I don't really romanticize college all that much. But I think it's an it is an existential problem for both.

• 1:13:25Ben Thompson?

  Look at you. Look at you. I don't.

• 1:13:29Andrew Sharp?

  What?

• 1:13:29Ben Thompson?

  College is easy, very easy. Didn't even try.

• 1:13:32Andrew Sharp?

  It was pretty easy. Let's not kid ourselves. I just think coming from the humanities world, I know a lot of people in that world. I'm channeling my Grantland pedigree here, the cultural elitist on the podcast. So many people in that world are so smug and dismissive about AI tools. And by failing to engage with these tools, a lot of the people running these institutions are just way less equipped to actually come up with solutions that help students build an immunity to the problem here or work around the problem and force everybody to use Bluebooks. Like, and I think that is part of what will compound the crisis that afflicts higher education.

• 1:14:15Andrew Sharp?

  But to your point, we started with the best take. That crisis was coming regardless.

• 1:14:19Ben Thompson?

  Well, it really goes back to this societal malaise slash sickness that I think is comes from a an overly optimistic, utopian view of human nature. Right? Like, like, there's a strong drive, there's been a drive for decades to diminish social taboos, to diminish mores, to empower individualism. And if you're not hurting anyone, just do what you want. And it's very easy at an intellectual level, particularly for people like us in our audience, who are high functioning adults, who can make our own choices and can control ourselves to say, yeah, everyone should be able to smoke weed, like to use to use an example. Right? But what does it actually mean up and down society when you remove even the imprint

• 1:15:04Ben Thompson?

  of illegality or the sense of that from that?

• 1:15:07Andrew Sharp?

  Everywhere smells like weed and it sucks.

• 1:15:10Ben Thompson?

  Like, like, there's so many things that people pass for themselves. Because I don't want, like, I like, you know, I'm actually not a weed smoker, but like, I have plenty of friends that are who like on the weekend, like, once in a while. And what they really Resented was the vague sense of feeling like they were doing something wrong because they've been good, good kids all their life and they didn't want to, it's all like, yeah.

• 1:15:32Andrew Sharp?

  Good little credentialists.

• 1:15:33Ben Thompson?

  They're not the problem, right? The problem is people that now are smoking a joint every day and it's like super concentrated and then like they're basically dropouts from society and all these sorts of smells everywhere, right? Like, there's this general libertarian argument that people, like your bit right here, they, they over index on themselves and what they want to see happen. And don't think about the reality of society and up and down and, and the collective efforts. And sometimes there's constraints that are put on you because it benefits the whole. And sometimes the constraints are legal, like, like the weed example. Sometimes those constraints are, are mores. Like, no, actually, you're going to be looked down upon or judged for doing this particular activity, even though you're not going to go to jail for it.

• 1:16:17Ben Thompson?

  Like, you're going to get looked down upon, right? And, and there's, there's a drive in just sort of the liberal idea generally, and I just appealed to the American ideals of free commerce and free speech and all those sorts of things. So I'm arguing against myself a bit here, which is take off the chains, let people do what they want. And there's costs that come from that and, and, and those costs don't manifest themselves immediately. They take a long time. And sometimes they're only exposed through things like AI and technology.

• 1:16:50Andrew Sharp?

  And unbelievably expensive college degrees that are ultimately are worth less in the economy that awaits us for the next 10 or 20 years.

• 1:16:59Ben Thompson?

  I'm optimistic about my daughter. I think she takes a tremendous amount of initiative.

• 1:17:03Andrew Sharp?

  You're going to be paying tuition the next four years.

• 1:17:06Ben Thompson?

  Well, I think it's like the most expensive. I don't know how to say where she's going, but it's not, not cheap. Uh, the, uh, she takes initiative. She's very self-directed. She has her own thoughts and point of view. Um, and I think she's the sort of person that has high agency and will benefit from this. She would, you know, and so, um.

• 1:17:27Ben Thompson?

  But of course, every parent thinks great things about their kids.

• 1:17:29Andrew Sharp?

  There you go. We'll see. For her sake, I hope that they continue to use take home exams. For your sake, I hope they don't.

• 1:17:37Ben Thompson?

  The depressing thing about this is the kids who want to learn and want to push themselves. And they're graded on a curve and so they're actually competing against the AI. They're not competing against other students. That, that, I meant to mention that earlier. It sucks, it sucks for them. Like, like we're, and so much of our society is like this, right? Like where we're actually punishing the people that want to do it the right way. By basically catering to the lowest common denominator. And in this case, the lowest common denominator is kids that don't want to write their own essays. We're actually punishing the ones that do.

• 1:18:09Andrew Sharp?

  Yeah. Well, on that note, a dour note to end on, but a rollicking podcast. And what's most important is that the Boston Celtics are now down 0-2 in the second round.

• 1:18:20Ben Thompson?

  0-2, going to Madison Square Garden.

• 1:18:23Andrew Sharp?

  Let's go Knicks. All right, Ben. Well, we only have one episode.

• 1:18:28Ben Thompson?

  I said a lot of controversial things. We're going to lose more listeners for anti-Celtic sentiment than anything else.

• 1:18:33Andrew Sharp?

  That's right. Jilted Celtics fans, I can't wait to hear from you in the days to come. And God, I hope they actually lose this series. Ben, we have one episode next week. It's coming at the end of next week. We'll be recording in person.

• 1:18:48Ben Thompson?

  No episode on Monday.

• 1:18:49Andrew Sharp?

  Very, very excited. Until then, enjoy your weekend and I will talk to you soon.

• 1:18:55Ben Thompson?

  Talk to you later.