(Preview) SaaSmageddon and the Future, Microsoft After a Market Correction, Anthropic’s Super Bowl Lies

Ben and Andrew react to a bloodbath for public Saas companies with thoughts on the future of software in the AI era, beginning with why companies choose to outsource solutions to Saas companies today, and why those moats may be more durable than skeptics think. Then: Why SaaS skepticism remains fair, including an analogy to the newspapers in the ’90s, the absence of anti-fragility, a variety of headwinds that will impact pricing power, start-ups with superior cost structures, and looming consolidation and layoff questions. At the end: The biggest SaaS company of them all and what Microsoft’s roadmap should look like, a response to data center skepticism, supply and demand for hyperscalers, why Ben hated the Anthropic Super Bowl ads, should AI hallucinations be good case law?, and a Vision Pro announcement.

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

• 0:00Andrew Sharp?

  Hello and welcome to a free preview of Sharp Tech.

• 0:08Andrew Sharp?

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

• 0:19Ben Thompson?

  Irritated, Andrew.

• 0:20Andrew Sharp?

  Oh, boy. Why?

• 0:21Ben Thompson?

  Well, you know, I was struggling a little last week with the sore throat. Got pretty sick over the weekend, had to take a sick day, which I never do. There's so much happening this week. I know, I feel, I feel like there's so much stuff I did cover. And I actually, it really irritates me. I'm like, I could have really used an extra day of, of publishing this week. And then, uh, but I was feeling better yesterday, doing well, and then today I was coughing again, just really annoying.

• 0:44Andrew Sharp?

  Well, here's the thing, you don't sound as bad as you did at the end of last week. Last week, you really did sound like Tone Loc on all your podcasts. And now you just sound a little bit under the weather. So I feel like we're making progress despite the setback here.

• 0:59Ben Thompson?

  This is like when, when you get like a warm stretch in like February and then you get like below zero in like, in like March. It's, it's the return, even if you know you're almost over. Yes, demoralizing. That's the word. I'm demoralized. That's the word.

• 1:14Andrew Sharp?

  Okay. Well, that's, um.

• 1:16Ben Thompson?

  It could be worse.

• 1:17Andrew Sharp?

  Okay.

• 1:18Ben Thompson?

  I'm not as demoralized as Sash shareholders, so, um, so there you go.

• 1:23Andrew Sharp?

  And that's where we're going to be for most of the show today. We're going all male on this episode, a lot of different beats to hit. And we're starting with two questions on a company that lost $350 billion in market value last week. You wrote about them on Monday and Rav says, Andrew and Ben.

• 1:42Ben Thompson?

  Took a sick day.

• 1:43Andrew Sharp?

  Excuse me, Tuesday, you wrote about them on Tuesday. Um, Rav says, Andrew and Ben, Microsoft got destroyed because the company sucks at AI. Azure is an AI winner, but the rest of the business is a loser. They have had access to all of OpenAI's IP for three years, and yet their own products are atrocious. ChatGPT beats Copilot in enterprise settings. GitHub Copilot was usurped by current. Windsurf and now Claude Code GitHub Copilot is stuck in 2024 Dragon Copilot already lost to Game of Thrones.

• 2:19Ben Thompson?

  Oh, look at this guy.

• 2:21Andrew Sharp?

  Yeah, here we go. Now Anthropic is coming for the Office suite by hijacking it. This encapsulates the issue facing the entire software complex today. The leading labs control the neurons, allowing them to dictate the entire AI future product suite through mid-training and post-training RL. Moreover, their AI products will always be superior to the ones produced by software companies leveraging their APIs. Thus, every software company faces the threat of Anthropic or OpenAI hijacking its distribution as they convert the promise of AI into material value. Furthermore, the labs have a structural pricing advantage because LLM API calls

• 3:06Andrew Sharp?

  are the most expensive part of any AI application. You cannot beat a competitor with a 70% lower marginal cost. Microsoft's failure to deliver a single good AI product is the red herring for all software companies. Even if you were handed the underlying LLM, you still wouldn't create a competitive product. If Microsoft can't execute, no one else will. Now, Ben, I read that. I have two notes. I think the final line, Microsoft is the red herring for all software companies. I think the phrase he wanted there is canary in the coal mine, not red herring. So different animal idiom, but.

• 3:46Ben Thompson?

  Right. We're good on the idioms. That's a good on the pronunciation.

• 3:49Andrew Sharp?

  That's right.

• 3:50Ben Thompson?

  Don't test us on idioms.

• 3:51Andrew Sharp?

  Beyond that one, no. I found myself nodding my head at basically every other point that was made there. So what do you think? What do you think of where Microsoft sits amidst all this?

• 4:03Ben Thompson?

  Well, I mean, where to start? Do we start with Microsoft? Do we start with the broader sort of ecosystem? I think the, there's one interesting line in here. He talked about, about how the AI companies are always going to be superior. And superior on what vector? This is maybe sort of the, the single biggest question, which sort of gets at what? Why do all these SaaS companies exist? What job do they do? In, in sort of the jobs to be done sense? And if the job to be done is to deliver a compelling AI experience, that's right, they are not going to be as good sort of definitionally than the labs themselves.

• 4:45Ben Thompson?

  But if anyone has used enterprise software, the sort of user experience and quality is not necessarily the selling point. Like, like, and this has been, it, it, this has been an eternal sort of issue in the enterprise broadly, where everyone is confused at, why do all these applications suck? Like, how do these companies persist? Like, like, what, what's the bit here? And the answer is often they are solving problems that you don't see, that no one sees, that, that it's that lack of visibility into the problem that should give you a hint as to why they exist.

• 5:27Ben Thompson?

  So maybe there's a particular issue and there's 47 layers of regulation and compliance, or whatever it might be. Let's take the most extreme example, healthcare. In healthcare, you have all these, you have things like, like the HIPAA laws. You have all these sort of like regulations or, or just, let's get into like your prescribing drugs, which have all these interactions with other drugs and all these sorts of things, X, Y, Z. And not only hanging over that are massive liability concerns, where you need to know for sure who is at fault if something goes wrong. And you have to have all these sort of backstops. And the, it is a extremely messy, difficult business that you can't afford. Number one, it's very hard to solve.

• 6:12Ben Thompson?

  So solving that problem actually takes a lot of work and you end up with. Because you're having to handle all these variables and all these edge cases.

• 6:22Andrew Sharp?

  Mm hmm.

• 6:23Ben Thompson?

  It's like definitionally impossible to have a good user interface to manage this. You end up with like an epic installation and doctors having legitimate complaints about filling in 50 gazillion boxes in forms. But every one of those boxes in forms is downstream of someone not being liable or there being some sort of rule or some sort of regulation. Or some sort of legitimate concern about some interaction effect and all these rules about what could go together and what can't. That sort of has to, has to be managed.

• 6:54Andrew Sharp?

  Yeah.

• 6:55Ben Thompson?

  And this is a problem in society broadly. People are frustrated at how difficult so many things are. And why do we have all these like layers of stuff when it's like, why can't the doctor just? Say what's wrong with me and prescribe something and be done with it. It's like, well, yes, ideally that's what would happen in 98% of cases. The problem is those 2% where stuff can go wrong if something's not caught. Number one, someone could die. And number two, the liability is going to be off the charts for everyone in that stack that screwed it up.

• 7:30Andrew Sharp?

  Yeah.

• 7:30Ben Thompson?

  What you're paying for is someone to accept that responsibility to actually go through and get all this stuff in order.

• 7:38Andrew Sharp?

  For the edge cases, sure.

• 7:40Ben Thompson?

  Right. And, and, and the, the frustrating thing is this probably ends up net worse. Right? Having every doctor spend most of their day going through a horrible UI. And drowning in paperwork and notes and all these pieces instead of what they got into the business to do, which is to help patients. Don't even get me started on the whole insurance sort of issue, right? Well, actually the whole insurance. Area Lego epic is a great example. They're downstream from Obamacare. Like they're the ones that like solved all these new. Issues that were brought on by government regulation. And now there's like entrenched in the marketplace and everyone hates them because they're hard to work with and they, but they have a this dominant sort of position. But the, like, that is.

• 8:21Ben Thompson?

  That is the actual thing that they are superior on.

• 8:26Andrew Sharp?

  Right.

• 8:26Ben Thompson?

  And it's frustrating to think about and talk about because they are superior on a vector that everyone hates. But it's the vector that actually drives the bottom line.

• 8:36Andrew Sharp?

  Well, they're not solving the the top line problem. They're solving problems beneath the surface that people aren't even really concerned about, but they're the only ones that can solve those problems.

• 8:44Ben Thompson?

  Many of which, many of these problems are driven by an avoidance of risk. And all these, and all these sorts of issues. So now, now, again, that's sort of an extreme example, but there's all sorts of things that are like this, where there's all this sort of muck that is just solved by a company, understanding the space deeply, going through and dealing with it. They talk to a CTO or a CIO or a CEO and they're like, look, you can have your employees sort of doing this using other software or Excel or whatever it might be. Or you could have this of all these layers of controls and you can feel confident that

• 9:24Andrew Sharp?

  The muck will be addressed.

• 9:24Ben Thompson?

  you're not going to sink the company, right? Or whatever it might be, right? Or, and so, and again, this isn't a great outcome. The outcome is you have all these crappy sort of experiences and interfaces and you have the problem that we've talked a lot about on this podcast of what is all the good stuff that doesn't happen when you're dealing with all this crap?

• 9:48Andrew Sharp?

  Yeah.

• 9:49Ben Thompson?

  But the problem is when you're managing a company, your most concern, the crap is visible or the downsides are all visible. The upsides are not. And so.

• 10:00Andrew Sharp?

  Well, and dealing with the downsides, dealing with the muck, I misspoke earlier. Epic and companies like Epic, they are solving the top line problem. They're just not doing it particularly efficiently and everybody who uses them are frustrated, but they're also addressing the muck.

• 10:16Ben Thompson?

  But not doing it efficiently in what way, right? It all depends on what, like, so everyone in tech, and I took it as a extreme example with healthcare, there's, but, but there's so many processes. I was talking about this with Benedict Evans. I thought he had a very good framing of this. And why do companies have like 400 SaaS apps or whatever it might be? It's pretty nuts. And the reality is, is if you have some sort of functionality where it's being done regularly. The, um, here's a good example. I was just having a discussion with Duman about, uh, interview scheduling. And in the interview scheduling, I interview people in different time zones. And so.

• 10:57Andrew Sharp?

  How do you put that in the calendar?

• 10:59Ben Thompson?

  How do you put that in the calendar? Exactly. And I, we were taking, uh, he was taking an approach that I didn't agree with. And the reason I didn't agree with is because number one, it's his job to think about that. That's why I'm outsourcing it. But number two, I might change the calendar event sometimes. And by definition, that's, it's, it, like, I have a lot of stuff on my plate, a lot of stuff I'm thinking about. And I want to make sure we have a system that minimizes the possibility that I mis-schedule something because it's in the wrong time zone. So in this case, sorry, Dumb, I'm gonna throw you under the bus here. He was setting the time zone based on the guest's location. And I'm like, this is stupid. They, they are not changing.

• 11:42Andrew Sharp?

  It's my podcast.

• 11:44Ben Thompson?

  No, no, the point is, is that like, like, there's, it makes a certain sense to it, right? Because then, because whenever I communicate with people, I'm always communicating in their time zone. Like, when I'm texting with them, figuring out a time. I've learned a long time ago, especially when I was in Taiwan, I'm the weirdo here, okay? I'm used to managing time zones. I can deal with it. It was always sort of.

• 12:03Andrew Sharp?

  I always appreciated it while you were in Taipei, you know?

• 12:06Ben Thompson?

  It was always a very hairy few situations whenever the time zone changed because Taiwan did not have daylight savings. Taiwan does not have daylight savings times. And they do here. And the, the likelihood of a mistake happening in those few weeks, just very fraught. Like, I'd get anxious about it.

• 12:21Andrew Sharp?

  But the point is, it's your calendar, so put the time zone that you're using. Is that right?

• 12:26Ben Thompson?

  That was, that was what I said, just because, and the reason is, is I know this is an issue. So I definitely should, and I usually do, pay close attention to the time zone that the event is in. But the highest likelihood of a mistake being made is me. Is like, I'm, I'm like, I'm out at my son's basketball game. Someone says, can we change a thing? I looked down, I changed the calendar. I don't notice the time zone. Now we're mis-scheduled and it's a big disaster, right? Like, that would happen. Like, so we need to. Have a process that assumes I am going to screw up and minimizes that issue. Okay, there is eight gazillion processes like this in every enterprise where it's actually pretty clear.

• 13:11Ben Thompson?

  It's not that hard to do, but what you're concerned about is the one fat finger or the one not paying attention and it's done. And, and this was sort of the point Benedict was making is a lot of these buttons or forms in your crappy enterprise application. What they are is capturing, that's like institutionalized process of this is something that's done repeatedly. So we're going to encode it, encode to make sure that the chances of it getting screwed up are very low.

• 13:44Andrew Sharp?

  Yeah.

• 13:44Ben Thompson?

  And that is offloaded, the complex, the dealing with that crappy, whatever it is, is offloaded to the employees who complain about it or whatever it might be. Or you can look at it from the outside and say this like, why are you paying $50 a seat for this application? You could just do, it takes three minutes to do it right. And it's like, yes, but one screw up, once, well, one screw up costs you a bunch of money. And so just broadly speaking, this is why I wanted to zoom in on this point in this email, which I think was a good email. But this superior on every vector is superior on every vector 98% of the time because the L M just does it better. And look at you have a natural language interface.

• 14:29Ben Thompson?

  I could say, oh, change my interview to X, Y, Z, and then it's changed. The problem is if you gain a small amount or save a small amount of money over time, that can be completely undone by one screw up.

• 14:42Andrew Sharp?

  By the 2%, which these companies are already paying to address with the SaaS that they're already paying for. That, that all makes sense to me, sure.

• 14:49Ben Thompson?

  So, so this is like, so this is sort of, I'm, I, I wasn't actually sure where we'd go with this conversation, but I guess we're starting with a defense of software to a certain extent, particularly in the face of L M's, which are amazing.

• 15:06Ben Thompson?

  And by their very nature, there's a thing I wanted to put in this rundown. I don't know if you added it later.

• 15:13Andrew Sharp?

  I did add it.

• 15:14Ben Thompson?

  Circle back to this.

• 15:15Andrew Sharp?

  I'm a little skeptical of it. We'll get there in an hour or so.

• 15:17Ben Thompson?

  We'll get there in an hour. Yes, this is professional podcasting. We'll give you a tease for later on in the episode. Uh, make mistakes. They hallucinate. They are probabilistic entities that the whole point is they're right. The vast majority of the time. And because they are sort of loose with it in this probabilistic way, they create this quote unquote, superior experience. But embedded in that superior experience is the possibility of error.

• 15:48Andrew Sharp?

  Yeah.

• 15:48Ben Thompson?

  And a huge amount of software is about eliminating the possibility of error.

• 15:54Andrew Sharp?

  Mm hmm. Fair enough. Well, before we go further down that road with some of the other SaaS companies who are implicated by everything we've seen this week, I do want to focus on Microsoft specifically because one thing I appreciated about your article earlier in the week was the callback to where we were two and a half years ago with Microsoft looking like a clear winner from the AI era. You had the integrity to cite your own optimism rather than cite one of like a thousand other people who were saying the same thing two and a half years ago.

• 16:26Ben Thompson?

  Look, I don't get a quote myself endlessly when I'm right. If I don't get a quote myself when it's not looking so good.

• 16:31Andrew Sharp?

  You have to take the L's sometimes as well. And to me, it was just a testament of how quickly all this has moved because all those conversations about Microsoft and the boundless optimism feel like they happened five years ago at this point. But in general, I mean, this is the biggest software company on the planet. What should Microsoft be trying to do? Like, where should they want to be in 10 years? Are they going to be a platform, something else? What's the roadmap for that company?

• 17:01Ben Thompson?

  Well, so get to Microsoft specifically. I think the other thing I disagree in this email with in this email is.

• 17:10Ben Thompson?

  I would have framed it as, why do we think Microsoft was going to be good at this when they've sucked at products forever?

• 17:17Andrew Sharp?

  For a long time, yup.

• 17:18Ben Thompson?

  Right, it's like, it's like he's expressing surprise that Microsoft-

• 17:20Andrew Sharp?

  Their advantage has not been product for 30 years. Let's be very clear about that.

• 17:24Ben Thompson?

  That's exactly right, which is, paradoxically, the reason to still be optimistic about Microsoft and sort of assume they're just the next big tech company to go through this cycle. We went through it with Google, went through it with Apple, went through with Meta. Amazon's sort of been a low level bit of concern, although I think there's some aspects of this discussion that are actually good for Amazon, which we can sort of get to in a little bit.

• 17:50Andrew Sharp?

  Okay.

• 17:50Ben Thompson?

  And now it's sort of Microsoft's turn to be facing skepticism. And the, the thing is, is what is the implication of software becoming dramatically cheaper to produce? I think for all the defense that I just laid out, which a lot of people have laid out, you don't get to stop there. You don't, you don't get to say like, nothing's going to change because software is really important. When a fundamental input completely changes, things are going to change. So this is where I went back to content, in sort of the, the internet, you know, the 90s

• 18:35Ben Thompson?

  internet. You start out and the internet seems like it's great for everyone. It's great for the New York Times, it's great for the Washington Post, another entity in the news this week. The Washington Post doesn't just publish now for people in the, what do you guys call it, the DMV?

• 18:52Andrew Sharp?

  The DMV, that's right, yeah.

• 18:54Ben Thompson?

  Hilarious, hilarious that the Washington DC area calls itself the acronym of what people associate with a horrific experience.

• 19:03Andrew Sharp?

  The worst example of bureaucratic excess and largesse, absolutely.

• 19:09Ben Thompson?

  It cracks me up endlessly, like, what is it, DC, Maryland, Virginia? It's not even a good acronym, that's the thing.

• 19:15Andrew Sharp?

  Oh, listen.

• 19:16Ben Thompson?

  I, I'm, it's-

• 19:19Andrew Sharp?

  A sensitive time for residents of the DMV because our team just traded for Trey Young and Anthony Davis and is apparently aiming squarely for the middle over the next three or four years after allegedly tanking to build a championship team. So I can't even mount a spirited defense of the DMV label here, but the Georgetown DMV, the actual DMV is better than it has been in my entire life. So I'm at least grateful for that as a DC.

• 19:45Ben Thompson?

  No, I heard it's great. I heard things like snow removal are excellent, um, great city services.

• 19:51Andrew Sharp?

  We're down bad right now. It is what it is.

• 19:54Ben Thompson?

  So, um, yeah, it sounds like your snow removal is being run by the DMV. That's sort of what I understand is going on. So, um, anyhow, the, the, uh, so the, uh, the DMV, I even totally forgot what I was going with this. Uh,

• 20:07Andrew Sharp?

  Oh, the Washington Post.

• 20:09Ben Thompson?

  Yeah, the Washington Post. Um, so your initial take on the internet is like, wow, the Washington Post doesn't just get to serve the DMV. They can serve the entire country. It's amazing. Our total addressable market just went from a few million, however many people are in the DMV. I have just said the DMV as many times like kind of the segment. But they could actually, it, it, it's the, it, their addressable market is astronomical. It's the whole world. This is great.

• 20:35Andrew Sharp?

  Everyone in the world will subscribe.

• 20:37Ben Thompson?

  The problem is, uh, that expansion in market applies to every single publication. That applies and most pertinently, it applies to the New York Times. And if you want the story of what happened to the Washington Post, it's that everyone subscribes to the New York Times. Like, so you're this, you're, you're the second, like,

• 20:58Andrew Sharp?

  Well, in this new expanse, power laws, yeah, power laws predominate. And so people aren't going to subscribe to multiple papers that are not particularly differentiated from one another and pay $20 a month for each one. You're going to choose one subscription and most of the people who are in that space have chosen the New York Times, which frankly has a more distinct point of view, which probably helps them retain customers.

• 21:25Ben Thompson?

  Well, yeah, they've been the big winner of this space journey. We're going to come back to the New York Times because I think it's actually a very interesting analogy here.

• 21:31Andrew Sharp?

  Okay.

• 21:31Ben Thompson?

  So the, but the point being is what was the input that changed? The, the input that changed was the cost of distribution. Newspapers actually were like manufacturing companies with the trucking business. They printed newspapers and they delivered them and put them on your doorstep and in a newspaper box in a stall and all these sorts of things. That was actually their business. That whole thing that they felt constrained them, I can't serve the whole country was actually what protected them. They had local monopolies in their geography. Once that went away, that was the, once that input went to zero, the cost of distribution, you're online, that was actually, in the long run, completely destructive, value destructive, because now you're competing with everyone.

• 22:14Ben Thompson?

  And over time, you're not just competing with all other publications, the cost of entry went way down. So suddenly you're competing with me. Like, the Washington Post is literally competing with me, because people can only read one thing at one time. And by the way, if they're subscribing-

• 22:32Andrew Sharp?

  Exactly, yeah. I mean, they're competing with you on subscription prices as well.

• 22:36Ben Thompson?

  Right, well, but from the eyeball perspective, you're also competing with Facebook and with TikTok and all these sorts of things. And I actually think this point, this is the one point I put in there that sort of like refuted my thesis, which is, I, at the beginning, was like, look, AI is not replacing software, okay? For all these reasons we sort of talked about. But you go to the content one, it's like, actually, the content people mostly consume today is all user-generated content. It's not professionally-produced content. And, but the thing is, it took 30 years. So, maybe my whole defensive software will be moot in X number of years, because AI actually will get good enough to do all that sort of stuff, right?

• 23:21Ben Thompson?

  That's very plausible. I think it's gonna take longer than people think, but then again, you could say that about lots of stuff that moves very quickly. Anyhow, that aside-

• 23:29Andrew Sharp?

  Well, wait, before we move on, can I actually read an email that's further down in the rundown here, but is related to this particular point on content? Marshall says, "One of the best parts of Ben's analysis is its roots in the history of technology. It provides valuable context and helps to ground the discussion in long-term dur- Horrible dynamics as opposed to what ends up being ephemeral. For example, when some bulls were claiming we were all going to buy three Peloton bikes during the peak of COVID. Given this, I'd love for Ben-

• 23:58Ben Thompson?

  I was probably a little too optimistic about Peloton, so look, I'm just pushing on my sore spots here, but continue.

• 24:03Andrew Sharp?

  There you go, you know, owning the L's along the way. Given this, I'd love for Ben to provide some context on what I perceive as a sea change in the way he seems to be talking slash writing about two areas of technology. Semiconductors and software. Has AI fundamentally changed characteristics of these industries in a permanent and sustainable way relative to the past few decades? My working hypothesis is that cyclicality will eventually return to the semi-

• 24:30Ben Thompson?

  Oh, great job. I saw that word coming. I'm like, man, I'm not sure if I can say this.

• 24:33Andrew Sharp?

  Deep breath, cyclicality, there you go.

• 24:36Ben Thompson?

  Lot of season there.

• 24:37Andrew Sharp?

  It will eventually return to the semiconductor business, cyclicality, and the software business-

• 24:42Ben Thompson?

  Look at you, just showing off at this point.

• 24:44Andrew Sharp?

  Yeah, there you go.

• 24:45Ben Thompson?

  Amazing.

• 24:46Andrew Sharp?

  Though diminished from its halcyon days-

• 24:48Ben Thompson?

  Oh, look at that, another one, amazing.

• 24:50Andrew Sharp?

  Will regain its luster, at least somewhat. In your recent piece on Microsoft, you compare the impact of Gen AI on software to the impact of the internet on newspapers. And though the analogy is apt to a degree, I think it may underappreciate the stacked and multifaceted nature of many software moats. While code writing becomes much easier due to Gen AI, and I imagine some switching costs get reduced, there are a variety of other moats enjoyed by leading software businesses that the newspapers did not have once their distribution monopolies went away. Is that fair, do you think?

• 25:25Ben Thompson?

  Yeah, no, totally. I was a little hesitant to, like, I was thinking about the content analogy like all weekend when I was thinking about, thinking about this piece. And I was a little hesitant to go there for this exact reason, because the defensibility of newspapers actually ended up being quite shallow. It really was just geography.

• 25:40Andrew Sharp?

  Yeah.

• 25:40Ben Thompson?

  And to his point, there's a lot more that goes into software. And so I think that's a valid point. The, the, the issue I wanted to push on though, well, number one, I just threw in the user-driven content bit. No, I don't think anyone in 1993 fully-

• 25:56Ben Thompson?

  Thought that actually 99% of most people's media consumption, oh, wait, maybe setting aside TV to a certain extent, was going to be user-driven content. Like, most people don't read newspapers at all. They don't read books, they don't read magazines, they are watching Instagram. If they're literary, they're reading Twitter and reading some stacks.

• 26:16Andrew Sharp?

  Well, they're watching YouTube. The YouTube views that were reported this week, it was like 200 billion or something like that. It's absolutely insane.

• 26:22Ben Thompson?

  No, I keep talking about YouTube's the biggest threat to Netflix, and I think I asked Greg Peters about this. Netflix is being modest. They're only talking about YouTube on TVs. If you talk about YouTube on phones and computers, it's a gazillion times higher. And I'm like, I was actually like questioning, I'm like, your situation is much worse. Maybe it's time to like be talking about this, like the reality of this. So, yes. So anyhow, but so the implication of this is you might be underestimating AI, its ability to, why couldn't AI actually discern all those rules and all those issues on the fly?

• 27:03Andrew Sharp?

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