(Preview) Video's Ongoing Victory Over Text, Google and YouTube's Abundance of Opportunity, Six Questions About an AI Bubble

On today's show Andrew and Ben begin with a 60-second iPhone review before turning to YouTube and Google's abundance of AI opportunities. Then: Six questions about the AI bubble, including reactions to Nvidia's investment in OpenAI, Oracle's financing vs. cloud incumbents, Microsoft's spending strategy, the looming power crisis, and more. At the end: A salute to the bubble prince, more on Meta's smart glasses, and "presage" confirmation.

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.

• 0:09Andrew 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 okay, Andrew. How are you?

• 0:22Andrew Sharp?

  I'm doing all right. Do you have an iPhone review ready for me today?

• 0:27Ben Thompson?

  I do not. Mine is actually arriving today. I am not one to sleep through my alarm. First time I slept through my alarm in years was literally iPhone order day. So I was 30 minutes late to order and thus a week late.

• 0:42Andrew Sharp?

  A full week late here. Oh my God. So I mean, look, you had no smart glasses last week, no iPhone this week. Ben, I'm concerned. Are you sure that you're the tech guy on the podcast here?

• 0:55Ben Thompson?

  Hey, I'm here to examine the space between Wall Street results and products. The products are nice, but not necessary.

• 1:05Andrew Sharp?

  Okay, fair enough. Well, I have the new iPhone and just a 30 second review on my end.

• 1:11Ben Thompson?

  Yeah, no one cares about my review. We need yours.

• 1:13Andrew Sharp?

  I love the new iPhone. It has tremendous battery life. I'm charging my phone like once every day and a half at this point, as opposed to once every 12 hours with my rickety 15 Pro. So that's a massive upgrade.

• 1:28Ben Thompson?

  So you just only charge it when you need to? You don't have a... So you like charge it one night, then the next night you don't charge it? You just wait till like halfway through the... This is insane. This is insane.

• 1:40Andrew Sharp?

  When you lay it out like that, no, when you lay it out like that, I do sound like a psychopath. That's not going to be by standard operating procedure going forward. But mainly this first week, 10 day period, I'm just curious to see how long the battery lasts if I don't charge it at night. I'm sure I'll settle into a rhythm where I am in fact just plugging it in every night and then forget about it. And that's going to work great. It wasn't working great with my old phone. I'd have to recharge during the day. No longer a problem now that I'm living the 17 Pro life. So thank you, Apple. I would also note the camera is much better than the previous cameras. Noticeable improvements.

• 2:23Ben Thompson?

  What are you upgrading from?

• 2:24Andrew Sharp?

  Uh, the 15 Pro. So it's not like I was on like a 13 or 12. I mean, they were really good cameras, but the 17 is noticeable improvement. And so I've really enjoyed that. My seven month old daughter Rose is a big fan of the new selfie technology that Apple has. So that's working great.

• 2:44Ben Thompson?

  Wait, she's operating the phone?

• 2:46Andrew Sharp?

  Well, no, but she loves sitting there while I operate it for her because the selfies, it works better. I don't know exactly what Apple did with the selfies. You could probably tell me better, but.

• 2:56Ben Thompson?

  Yeah. Do you want to know?

• 2:58Andrew Sharp?

  Yeah, please let me know.

• 2:59Ben Thompson?

  It's actually quite, it's funny because Apple was like late to the camera in general. Like the first iPhone didn't even do video and it's like, it was sort of an afterthought. It's funny because it became such a driver for the phone in general. But then the selfie camera itself sort of languished for ages. And this year they're like, oh yeah, this is actually probably a really important thing. And your selfie camera was aligned with the phone and this transformed media, right? Like suddenly we were getting vertical videos. That's what you got naturally with the sort of the front camera. And that's, that's fine. The like, that's a thing in culture. Now we see vertical videos all the time. They're

• 3:41Ben Thompson?

  actually better to consume on the phone. But sometimes you want to get a broad shot, right? You want to sort of get, get things across. And so you would, you either, if you do a selfie camera, you have to, normally you would have to crop it or you have, you flip the phone and you sort of hold it awkwardly. It's just easier to hold a phone up and down. So what they did was basically do a square sensor. So you could hold the phone any way you want and you just press a button to flip between portrait and, and it's going to be the highest possible quality every time, no matter what you do. So.

• 4:14Andrew Sharp?

  And I'm here to testify, it works great in practice, even as you're juggling a baby in your arms. So great job, Apple. And the only other note I have is that our listeners were exactly right. Liquid glass, not only not horrible, but pretty elegant and pleasant to use. I've got my guard up for some sort of bugs or I don't know, maybe the experience starts to get crappy a couple of weeks from now, but I've really enjoyed my early interactions with liquid glass. So.

• 4:45Ben Thompson?

  Here's a question. This is the big question. Have you picked up your old phone at all since you used the new one?

• 4:51Andrew Sharp?

  Not once.

• 4:52Ben Thompson?

  Well, you should because if a user interface change is working, then you pick up the old one. You're like, this feels so ancient. I can't, I can't believe this is how it used to work. So you have to do that test after, after this podcast. Let us know.

• 5:08Andrew Sharp?

  Does the Tim Cook apology need to be as loud as the disrespect was? What do you think? A lot of people like these new iPhones.

• 5:15Ben Thompson?

  Well, I mean, this is what I picked up on from Apple at WWDC when they announced the Quid Glass, which is, this is a company, what I, I think I called it Apple retreats and sometimes retreats are good and necessary and appropriate. Like, and they, this year was clearly a year, we're going to do what we do best. We're going to focus on the operating system and the user interface and we're going to focus on really great new phones. And the AI questions are all still wide open, are all still TBD. But it's good to sort of reset and be like, yeah, we're still good at what we do.

• 5:58Andrew Sharp?

  And that's the key question is like, are they still good at what they do? That's what I was asking back at WWDC in the wake of that. The core competencies have those eroded and I don't want to give Apple too much credit in the midst of my iPhone 17 euphoria. Because part of the reason I'm so happy is because I had come to hate the 15 Pro I had. But I really do feel like they nailed these upgrades. So I'm back in a satisfied Apple customer. And I can't wait to hear what you think of the iPhone 17.

• 6:31Ben Thompson?

  Well, I already know mine's better than yours.

• 6:33Andrew Sharp?

  Max arrives.

• 6:34Ben Thompson?

  Well, mine is better than yours. I can already tell you that right now. Number one, it's a Max. I can't believe you're, you're still, if you're worried about battery life, you gotta be rocking, rocking the Max. I mean, I-

• 6:44Andrew Sharp?

  You know what I'm worried about with the Max is that I already spend too much time on my phone. I actually don't want a bigger screen that's going to be an even better experience because I don't think that would be healthy for my touch grass habits. That's my concern.

• 6:59Ben Thompson?

  It's funny, like I, I held on to the regular Pro for ages and ages and ages, finally switched last year and then- Last night I was picking up my phone. I'm like, wait, is this my old phone? It's so small. I'm like, oh no, this is the Macs. I'm so fully acclimated. I'm like, I want more. Give me, give me a bigger one. I can't believe I used to live that way. Uh, I do still have problems typing. I don't know if you've ever noticed my texting, there's random like line breaks. Cause I'm, my thumb is still not fully acclimated even after a year. But also, uh, my phone will be better because it will be orange. So, um, big L by you, but what are you gonna do?

• 7:35Andrew Sharp?

  I just hope it gets there eventually, you know, already a week late. Who knows when the iPhone Max will eventually arrive.

• 7:42Ben Thompson?

  Today between one and five.

• 7:44Andrew Sharp?

  Okay. Well, um, speaking of today, as for the show, we've got some bubble talk on deck in the middle, but we will begin today with the blob and the giant hiding in plain sight. YouTube and Google, you had some interesting follow-ups earlier this week to your interview last week and the conversation we had on the show. So I'm going to read from your article on Tuesday. The headline was the YouTube tip of the Google spear. And in that piece, you write, here's the trillion dollar question.

• 8:17Ben Thompson?

  No, that's not what I wrote. I, I said, what is the million, nope, strike out, billion, nope, strike out, trillion dollar question? Let's get some accurate copy and pasting here.

• 8:27Andrew Sharp?

  Well, I thought to myself, I don't know if reading strike through text is really going to come through on the podcast medium.

• 8:35Ben Thompson?

  Well, everyone recorded it. I could do a reproduction of, of the podcast recording of the article. Here's the mill, or I did so much better the first time. Here's the million, a billion, trillion dollar question. You know, you gotta catch yourself and then say it again. That is the strike through in, in real life.

• 8:52Andrew Sharp?

  Well, you can tell I consume these via text, not podcast.

• 8:57Ben Thompson?

  To be consumed, but what, that's right.

• 8:59Andrew Sharp?

  I'm a proud word cell here on the pod. Uh, here's the million. Billion trillion dollar question.

• 9:08Ben Thompson?

  Catch yourself and like say the next one. You're saying the wrong thing anyhow. Continue.

• 9:12Andrew Sharp?

  We'll workshop it. The million trillion billion dollar question is what is going to matter more in the long run? Text or video? The history of social networking suggests that video is, in the long run, much more compelling to many more people. To put it another way, the things that people in tech and media are interested in has not historically been aligned with what actually makes for the largest service or makes the most money. People like me or those reading me care about texts and ideas. The services that matter specialize in videos and entertainment. So Ben, let's start with that idea because I don't think we talk about it enough on this show.

• 9:55Andrew Sharp?

  Do you want to expound on the dynamics you're describing there? And why video might matter more than text in the long run?

• 10:03Ben Thompson?

  Well, what did you just say? How do you consume techery?

• 10:06Andrew Sharp?

  Via newsletter, text.

• 10:08Ben Thompson?

  The written word, yes.

• 10:10Andrew Sharp?

  That's right.

• 10:11Ben Thompson?

  It's kind of an interesting dynamic that I picked on years ago in the context of Facebook versus Twitter where the media loves Twitter and people in tech love Twitter. And the whole lure of Twitter, and I was in this, I remember being at business school and like trying to recruit people to use Twitter. I'm like, this is such a, like, you have to be on here. How can you be interested in technology and not be like, and I was like, I did a whole thing, like as part of the tech club, like teaching people how to set up their feed and follow XYZ. I'm like, yeah, it's really hard to get started, but once you're, once you're get it figured out, then it's super great. And that was always my critique of Twitter is like, it's too hard to get started, too hard to get your feed optimized.

• 10:56Ben Thompson?

  And I think there's a bit of that that certainly is true. Like there's bits about the feed is much more algorithmic now, which I think is more approachable for people generally speaking. Even if some people who like the old Twitter and their perfectly curated feed find it annoying or frustrating. But I think that's only part of it. I think the reality is, is that Twitter is the reason why I love it so much. And I presume the reason why you love it so much is it is so dense and packed with, it's like Information, yeah. Yeah, it's like what in information and information from all sorts of things altogether. And you can read it and you can feel super plugged in.

• 11:41Ben Thompson?

  And even today, like I still rationalize the amount of time I spend on Twitter. Because even on a daily basis, I probably see at least one tweet a day and probably more that actually is beneficial, that affects my thinking, that makes me like sort of think about something different or triggers a thought process that leads to an idea. And there's nothing better for doing that even today. And I think the reality is, this is kind of hard to talk about because of course, us being word cells, to your point, highly value this trait. So this sounds insulting. Most people just aren't that interested in doing that.

• 12:24Ben Thompson?

  They like, and this goes back to the ongoing joke slash truth about me and like my TV consumption, right? Like, maybe this is part of like how I was raised, like my parents were super strict and I couldn't watch TV except for sports. That's why I love all these sports and TV and I really don't watch anything else. And I read all the time. I would read like, I got grounded as a kid by not being allowed to read because it was effective. It's not like I associated reading with punishment. It's because I read like 10 books a week and I'm not even exaggerating. So the, so, so to me, like Twitter is just like, it just slots right into that. And the idea of like sitting down and I can barely make it through, like I, I never finished Succession. It's like, this feels like work, not doing it.

• 13:08Ben Thompson?

  I got like a season and a half in, much less all the slop that's on like all these other streaming services. And it's just, but why do I still write about it? Why do I think Netflix is compelling? This is a bit where I'm not writing from personal experience. I'm writing from you look at the data. We know about the number of amount of TV that's watched. We we know about sort of the habits and like thinking about things like advertising and all that sorts of bits and pieces. It kind of goes into, I feel okay talking about the new iPhone, even though I don't have one. Because I'm thinking about it sort of from a structural perspective. And certainly it's useful and beneficial. And sometimes I do have blind spots about stuff that I don't watch.

• 13:52Ben Thompson?

  Or because I missed something from the sort of the personal experience. I acknowledge that's the case. But the fact of the matter is, according to the numbers, I'm the outlier, not everyone else. Yeah. And you see this, you saw this in the late 2000s with Facebook versus Twitter. There were a lot of people in tech on Twitter, of course, that couldn't figure out why Facebook was so popular relative to Twitter. And I remember even I I signed up for Facebook right when it came out as well as Twitter and never really touched it for ages. And I remember being in Taiwan and I was so. It even then, even though I wasn't thinking in stratechery terms specifically, I have no idea, write an article about this.

• 14:33Ben Thompson?

  It just struck me how other people, and I was like an English teacher back then, and all the other English teachers were obsessed with Facebook and they were on it all the time. And I'm like, I just like Twitter is so much better. It's so much more interesting. And uh, and again, but I see that and and recognize I'm the weirdo here, not sort of all these other people. And what was Facebook back then? Facebook pretty quickly was photos. People preferred photos over text. The text was interesting when Facebook was just text, they were on to it, but then photos.

• 15:09Ben Thompson?

  And then video comes along and you see the rise, you know, you'll TikTok really blindsiding Facebook, not just by virtue of being video, but also video from anywhere. And actually it turned out, and I, this was probably one of my best calls, even though I only got it like 70% right. Back in 2015, saying Facebook has to go beyond the social network. Social, actually, social networking is not the end game. It is a way to get scale so that you can just be pure entertainment. And entertainment is the end game and entertainment.

• 15:42Ben Thompson?

  Is for me, Twitter is entertainment.

• 15:45Andrew Sharp?

  I was gonna say.

• 15:47Ben Thompson?

  For everyone else.

• 15:48Andrew Sharp?

  Twitter entertaining and enriching, but most people don't have the energy.

• 15:52Ben Thompson?

  Right. They say like you, you gotta pray that you can do what you love. Probably the closest bit of doing what I love in my life is the fact that I get to justify reading Twitter 24/7 because I can tell myself it's for my job.

• 16:08Andrew Sharp?

  Yeah. And it gets dangerous. It can get abused. I'm speaking from personal experience there. But yeah, I mean, that's the reason it resonates with me. We mentioned this over the summer, even though Steve Jobs likes to think of Apple products as, or liked to think of Apple products as productivity enhancers and bicycles for the mind, the iPhone is ultimately a consumption device more than a productivity device. And that's what made it the most successful consumer electronics product in world history. And the reason I say we don't talk about it enough is because the shift to video, I mean, it's undeniable that shift is already happening. Like everyone in the world.

• 16:50Ben Thompson?

  I mean, TikTok is dominant.

• 16:51Andrew Sharp?

  Than ever. Yeah.

• 16:52Ben Thompson?

  Reels is all video.

• 16:53Andrew Sharp?

  More video than at any point in human history. And there's just an overwhelming amount of social implications for that shift and then business implications. But it's not clear that it's fully reflected in how people are forecasting what the world might look like in an AI universe, which is sort of what your piece was focused on this week with YouTube.

• 17:17Ben Thompson?

  Well, I mean, you just sort of zoom out and you're trying to sort of make forecasts, not just for today or tomorrow or next year, even though you want to dismiss products forever based on how they are right now.

• 17:29Andrew Sharp?

  Oh, boy.

• 17:32Andrew Sharp?

  We're gonna address that later in the show. Don't worry.

• 17:35Ben Thompson?

  All right. Fair enough. The, but, but if this overall concept is right, and, and to be clear for this, this article, and I probably should have been clear about this. I'm talking about like consumer AI, like what people, you know, what people resonates, what makes money. If you look back to the history of mass media, newspapers to magazines to TV, if you look back to the history of user generated media, which is probably a better name than social networking, because that actually captures TikTok, which really isn't a social network at all, in all cases. Text is there, it's important, but it's superseded by images. And they're both massively superseded by video.

• 18:20Ben Thompson?

  That is actually the dominant one that matters most, that takes the most share. So if you apply that to AI, which you might not, but let's apply it to AI just for, you know, our amusement here. We have text, ChatGPT dominates text. I think there's a good chance it will always be the go to text source.

• 18:40Andrew Sharp?

  Yeah.

• 18:40Ben Thompson?

  And text usually always comes first because text is easiest. Like, that's just sort of, that's been the case for all the mediums as well. That text was easier in the analog world. The printing press came years before the camera, which came before video. It was easier on the internet to send sort of text over. So we had text social networking before we got images, before we got video. We needed bandwidth, we needed 4G at a minimum, all these sorts of pieces. And with AI, we got text first. And then we have images. And what was the last real viral moment for ChatGPT? When the whole.

• 19:12Andrew Sharp?

  Studio Ghibli?

• 19:14Ben Thompson?

  Yeah. Well, we could talk about pronunciation later in the show as well.

• 19:19Andrew Sharp?

  Great.

• 19:20Ben Thompson?

  People like images.

• 19:21Andrew Sharp?

  Well, and speaking of the images issue, this again speaks to my life as a word cell. I was completely unaware of this until I was prepping for this specific podcast episode. But Google's Gemini app has been number one in the App Store for the past couple of weeks. And per CNBC, they launched an updated version of its Flash AI model called 2.5 Flash Image, which has a new image editing feature called Nano Banana. And the app allows users to blend multiple photos together and use prompts to create such things as digital figurines of photos that a user uploads. The product helped bring in 13 million new users to the Gemini app in four days.

• 20:05Andrew Sharp?

  And per Josh Woodward, a VP at Google, users have uploaded five billion images in less than a month to use the Nano Banana editing feature.

• 20:16Ben Thompson?

  No, the Nano Banana thing's, it's incredible. You should try it. Like, it. Works incredibly well. It's really easy to use. And I think it's a pretty big deal. You see apps pop up to number one in the App Store for a day or two. Because the App Store rankings are very sort of, the half-life is, is very short. So you can have an app go viral, it's up there for a day or two, then it tumbles on down the charts. The fact that Gemini has actually been number one for weeks, basically since this came out, and there keeps being viral meme, or like, to, to this point, it's not just about the digital figurine. It's like a new idea and everyone does it and it goes around and it's like, there appears to be some sort of sticking power.

• 20:59Ben Thompson?

  And part of this is that Google's really good at this. Like, like the Nano Banana capabilities are, are really good. And we saw this a little bit with Mid Journey. Like Mid Journey kind of always ended up stuck buried in Discord. I think that was a brilliant place to start. They probably needed an app sooner than they did and sort of moving along. But it was, there were a lot of people spending a lot of time on there just going through images and creating images. Like people like images. And this shouldn't be a surprise if we look at the history of media. But that means we're only halfway because the end state is video.

• 21:36Ben Thompson?

  Video is what people like the most. And you might sit here and say, oh, but people aren't gonna like AI video. To which I would go back 10 years and did you forecast that people would actually be spending way more time on user-generated videos on TikTok that are 30 seconds long than they would be on produced content? Like the, like, be careful in your presumption around human preferences. Broadly speaking, we know that humans like video. So given that, and again, maybe they won't like AI video, but I think they might. You sort of, who's gonna win that? And Google not only has the channel with YouTube,

• 22:21Ben Thompson?

  their video creation capabilities, like Nano Banana is amazing. There are also some other pretty good image generation. Mid Journey is still really, really good to take sort of one example. OpenAI's image generation, they already have their vital moment. It still is, it is pretty good. I think Google's is better, but it's competitive. Video is not competitive. Google is so far ahead, like just astronomically, like it was chat. OpenAI tried to get ahead of it with their Sora sort of launch last year. And Google just embarrassed them with Veia 2.

• 22:54Andrew Sharp?

  I remember.

• 22:55Ben Thompson?

  And since Veio 3 has come out, like it's amazing. And now they've actually productized it. And here's, this is the big deal. This is why I wrote this article, even though it's late. Google's stock actually has been on a tear for a few months. This is not a Facebook. I called it at the bottom. I'm going to pat myself on the back for the next five years. I am late to this. And the reason I'm late and the reason I wrote it now is because the fact Google has the capabilities has never been in question. DeepMind, that's why Elon Musk and Sam Altman started OpenAI ages ago. Cause it was clear even a decade ago, Google is the best positioned to win this. And they've gotten refocused and they're shipping good models, even though they like, they started out so embarrassingly.

• 23:39Ben Thompson?

  What after, you know, that whole Bard thing and the launch, still in the craziest keynotes that I've ever seen. They literally, they, people, a guy went up to, he did a presentation and he's like, let me demo it. And he went back to the counter, there was no phone there to do his demo on. It was, it was amazing.

• 23:57Andrew Sharp?

  Was this the thing they did in Paris trying to respond to OpenAI?

• 24:00Ben Thompson?

  It was crazy. Like people are presenting, they didn't know it was on the slides. It was one of the wildest, it was wildest keynotes I've ever seen. Like it was, I can't find, I think it's, I don't even know it's on the internet anymore.

• 24:12Andrew Sharp?

  Scrunch from the internet.

• 24:13Ben Thompson?

  Yeah, it is, it's crazy. So, um, so the, the, they're so.

• 24:18Andrew Sharp?

  But that's where they were. They were flat footed and people were like, okay, how did you let this happen? But now here we are.

• 24:24Ben Thompson?

  These image models, they dropped these video models. But the question was, can they actually productize them? Can they actually ship?

• 24:33Ben Thompson?

  And what was such a big deal about this YouTube announcement last week is not just that YouTube is the obvious channel, but they actually shipped.

• 24:44Andrew Sharp?

  Mm hmm.

• 24:45Ben Thompson?

  And if they figured out how to productize and ship and not just ship like fun little Veil three applications in YouTube, which is great.

• 24:56Andrew Sharp?

  What did they actually ship though at the, as far as YouTube is concerned, just to remind people?

• 25:01Ben Thompson?

  Some of this stuff is live, some it's not. So fair enough. We can wait, check in in a month or two, see how much actually got out the door. But the stuff was there. Like it was be, it was like, I think it was far enough along that I'll call them on it. If this, none of this actually sees the light of day.

• 25:15Andrew Sharp?

  But they're AI tools for creators essentially to incorporate AI. Is that right?

• 25:20Ben Thompson?

  Well, so that you have Veil three that anyone's gonna be able to use. You can use a short to like make, to, to like make videos or you can just upload a bunch of clips and it will put the clips all together into a narrated video and then you don't have to like organize it or whatever it might be. They had, actually I, the one that is pretty funny, I'm actually kind of excited about is text to song where you can get someone like, actually this might be a good sharp tech marketing tool. You could clip a rant or something like that and it will make it into a song. Um, which again, you can see a lot of misses with this, but you can imagine a couple of hits will be pretty spectacular.

• 25:54Andrew Sharp?

  I, the next anti-monopolist rant is gonna be a big hit on YouTube.

• 25:58Ben Thompson?

  Yeah, no, there's, there's, just brace yourself. There's gonna be some viral videos that go around of someone taking like Trump or something or other and just like making a song out of it and it's gonna be very funny. So, uh, that's coming. And those are more sort of consumery, sort of easy access bits and pieces. The big one that sort of like blew my mind was this auto-taking capability, which is.

• 26:24Ben Thompson?

  Creators, they do feature products, like they get that actually the highest end creators, they make more money off of YouTube than on YouTube. Where, you know, you watch like MKBHD and he's doing like the Samsung da, da, da, da, da. That's where he's making his real money, you know, even more so than the YouTube ads. But uh, that was actually an interesting bit about the presentation. YouTube wants into that business and they're framing it as like, we're helping you freeing up time. This is easier. Yeah, there's a bit from YouTube's perspective, which is you're making a lot of money on our platform that uh, we're not getting a piece of, but um, Yeah. You could certainly see for lower level creators who don't have the capability to do those brand partnerships, it will be better. You can also see some of those brands going to the high end creators, say, can you just go through YouTube? We don't want to deal with you individually.

• 27:08Ben Thompson?

  And then suddenly their, their, their cuts taken. So there's a little bit of tension there. But as part of this feature, you can insert a link to your video. And so, and that can be, that's one of the ways your monetization can be gated. Like how many quick throughs did you actually generate? How many people went through? Did you actually drive sales? You get more sophisticated advertising than just like, did you say the spiel in the middle of the video? Yeah. To do this, you have to upload it to YouTube and then in the YouTube editor, you have to go find the spot. You have to insert the link and then you have to like cut the link off at the right time. And it's, it's not that it's hard, it's just annoying, right? It takes like a while, you have to go in and do it. And then if you change the video, you have to do it again and like all this sorts of thing. And YouTube's like, look, no, we could take care of it.

• 27:53Ben Thompson?

  Give us the link. We will figure out the right spot. We'll put the link in and then we're good. And it's all you have to say at 20 minutes. It's like, oh, the AI can see he's talking about a Samsung phone. I have a Samsung link here. I'm going to put the link in the video. Super basic. Super basic and incredibly profound. Because Because. This, we talked about this in the context of Meta a year ago, which is my contention that every pixel on Instagram going forward is going to be monetizable. They will be able to recognize every item in every video and attach a link to it. Or create some sort of bidding process. The actual business model will see what that sort of looks like.

• 28:37Ben Thompson?

  And the reason I framed that in the context of Meta is I've gotten a lot of traction by being pro Meta for a long time, for sure. And also the sense is Meta's founder led, Meta can ship. Here we are a year later. Meta's AI is like a total reset, kind of in disarray. And I thought, again, I go back to that. My interview with Mark Zuckerberg was so weird this year. It was pre reset and I felt so many things he didn't talk about like this, like using AI in VR, which are back to his talking points. Like there was a lot of the meta keynote last week that was trajectory talking points, which is great. Love to see it. But the reality is they're kind of a mess.

• 29:20Ben Thompson?

  And Google shipped it. Google, they shipped a very small version that is very pro creator, but it's a straight line. What's happening? The AI is identifying a product and inserting a link.

• 29:31Andrew Sharp?

  Yeah. Well, so to recap, first of all, just loving your evolution here, growing from a little calf out there in the pasture to a big, strong Google bull on the other line.

• 29:43Ben Thompson?

  Google's always had the pieces to do it. The question was, could they ship?

• 29:48Andrew Sharp?

  Yeah.

• 29:49Ben Thompson?

  YouTube at least is shipping and then you back up and it's not just that part of Google is shipping. Arguably the most important part for winning the future of consumer is shipping. That's what YouTube is. It's, it's.

• 30:01Andrew Sharp?

  Well, that's the key. That's what you synthesized with your article. It's if you look at the history of media, AI video is probably going to trump AI text on the consumer side as far as a market opportunity. Then you look at the advantages Google has and what we've seen even over the last two and a half years. Google is going to be much better in AI video, at least for the foreseeable future than any of its competitors.

• 30:28Ben Thompson?

  Right. By the way, they have all of YouTube video for training data. Like everyone kind of scrapes it. And it's, you know, so everyone is also using YouTube video data. I imagine Google is much more efficient and much more capable of using it by virtue of owning it.

• 30:41Andrew Sharp?

  But also, Google has a clearer path to monetizing all of these advantages than any of its AI peers, at least as we sit here in 2025. And that's the other piece.

• 30:54Ben Thompson?

  Well, Meta's the other one. Like Meta, this is the reason I was bold. In the Meta article, I kept saying, oh, this also applies to Google. This also applies to Google. I just sort of gave Meta the benefit of the doubt that they would be better at shipping. And that was wrong. So. Go read the Meta AI abundance article and just search and replace Meta for Google. And all this stuff applies. They have the surfaces to manifest it. They have the business model to manifest it. AI is going to be one of the biggest gifts to advertising ever. It already is in terms of generating the ads themselves. It's huge.

• 31:27Andrew Sharp?

  Yes, and I think in the Meta article that you're referencing, you said that Meta has a chance to be the most valuable company in the entire world. So find and replace and Google has a chance to be the most valuable company in the entire world for everybody keeping track at home. Speaking of monetizing opportunities, though, I want to read this note from Joshua. He says, "How big of a threat to Amazon is Google increasing the affiliate ad surface in YouTube? AI product recommendations seem like an emerging and relatively underappreciated use case." All right, and that is the end of the free preview. If you'd like to hear more from Ben and I,

• 32:09Andrew Sharp?

  there are links to subscribe in the show notes, or you can also go to sharp tech.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 at sharp tech.fm.