Welcome back to This Week in Stratechery!
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On that note, here were a few of our favorites this week.
Data Center Discontent. The impact of AI is, at least for now, being felt digitally: that is where AI is useful, and the more digital a job, the more it is threatened by LLMs. AI, however, depends on data centers in the physical world, and building data centers needs permission. This gives normal people the sort of veto power over AI they didn’t have in the face of globalization; I make the case inMonday’s Updateand onSharp Techthat understanding this dynamic is more important that trying to correct misinformation, which is a symptom, not a cause, of data center opposition. —Ben Thompson
Agent Economics. What will the internet look like when ad-supported models are rendered obsolete by shifting user behavior and the rise of agentic web traffic? Ben considered this question last summer withThe Agentic Web and Original Sin, and I was surprised to learn this week that Parag Agarwal, former CEO of Twitter, is now focused on devising solutions for exactly this reality.This week’s Stratechery Interview with Agarwaldives deep into the economics of content on the Internet, why ads make sense for humans, and why incentivizing content for agents will be different, and how Agarwal and Parallel are trying to solve them. I learned a ton from this interview, and I bet you will, too — and don’t worry, we did get a few bonus questions on the ride at Twitter.—Andrew Sharp Never Count Out the Slime Mold.**Wednesday’s Daily Update on Google I/O reminded me of an iconicleaked memoabout the ungovernable and poorly coordinated mold in Mountain View, as the company seems to be throwing 10 different types of AI spaghetti at the wall to see what sticks. Then again, Google is now a nearly $5 trillion company and its transformer architecture supercharged the AI era. That second part is why,when Ben highlights a DeepMind approach to building AGIthat’s distinct from the approaches at OpenAI and Anthropic, I’m compelled to both pay attention, and remember: for all of Google’s faults and misses, they do in fact have plenty of historic hits.*—*AS
Stratechery Articles and Updates
Data Center Discontent, Understanding the Opposition, Fixing the Problem— There are understandable reasons for people to oppose data centers; the only solution that will work is simply paying them off.Google I/O, World Models, I/O Spaghetti— Google I/O put AI everywhere, for better and for worse. Meanwhile, is DeepMind aligned with Google’s business objectives?An Interview with Parallel Founder Parag Agarwal About Valuing Content on the Agentic Web— An interview with Parallel founder Parag Agarwal about valuing content and incentivizing its creation in a world of agents (plus questions about Twitter).
Dithering with Ben Thompson and Daring Fireball’s John Gruber
Asianometry with Jon Yu
Sharp China with Andrew Sharp and Sinocism’s Bill Bishop
Greatest of All Talk
Wemby, Harper and an Instant Classic from the Spurs in Game 1 vs. OKCA Note on the Future of GOAT and An Emergency Top Five
Sharp Tech with Andrew Sharp and Ben Thompson
This week’s Stratechery video is on The Inference Shift.