# Netflix Angst, the End of the Internet, and Meta’s VR Glasses | Sharp Tech with Ben Thompson Sharp Tech · 2026-10-23 · 98 min · https://www.youtube.com/watch?v=bj4ahI5Nk6g ## Transcript Andrew Sharp Hello, welcome back to Sharp Tech, presented for the first time by Stripe. I’m Andrew Sharp, and sitting across from me on the sofa is Ben Thompson, who’s in charge of our new studio. How are you doing? Ben Thompson Somehow, it ended up becoming a studio. When I moved back here, I wanted to set up a studio. I also needed an extra bed in case guests came over, so I ended up getting a sofa bed. It’s a very nice sofa bed. Andrew Sharp It’s comfortable. Go ahead and sit down. Ben Thompson To be honest, I’ve set up all the sound equipment here, and it works surprisingly well. Andrew Sharp I think the podcast gets much better every time we’re together. We both really like each other. Ben Thompson That’s right. Since the voice is really loud, you need a space with very good acoustics. Andrew Sharp I lowered the volume to match my podcast voice. Okay, you’ve sat down. I’m really looking forward to this. Ben Thompson It has really improved a lot. Andrew Sharp That’s right. All of this became possible thanks to Stripe. We invested a lot of money into our project. I didn’t just convert my office into a studio; I was planning a real studio. There might be some advertising involved, but it is a podcast I am truly proud of. Sharp Tech is doing such a great job, and every time we are together, I think, “This time was much better.” From now on, we’ll be together almost every time. It’s a completely new era, a completely new studio. For those who missed the Stripe announcement earlier this week, Sharp Tech will be a public podcast going forward. All episodes will be uploaded to YouTube. There will also be members-only episodes. We are preparing a special bonus episode for Sharp Tech Re subscribers. It will be about 30 minutes long and is scheduled to be released sometime during the week, probably around Sunday. But there’s one big problem: I’m more dependent on American Airlines now, and that could be a stumbling block. Ben Thompson It was fine today, though. Andrew Sharp I had to wait on the runway for about 30 minutes before arriving in Madison, but I made it and had a meal at Culver’s. So, here begins life in the Midwest. Ben Thompson They might sponsor the University of Wisconsin athletic teams. Andrew Sharp That could be a first sponsorship. I watch a lot of America’s Got Talent these days. Did you see Nini Le? Ben Thompson Of course I watch America’s Got Talent. I haven’t watched the full show; I’ve only seen YouTube clips. Andrew Sharp No, there’s a girl from Thailand. Ben Thompson Oh, right. This is your favorite celebrity right now, right? Andrew Sharp Yeah. I have someone I like, too. I’m not obsessed with her or anything. She just looks like a 6-year-old girl. Ben Thompson Let’s not judge her at first sight. She’s unbelievably amazing when she comes on stage. That goes for the performance and the stage presence, too. Then suddenly you realize she’s been performing every week at night markets in Thailand since she was 10. Not only is she incredibly talented, but you also think, “Ah, that makes sense.” It feels like every piece fits together perfectly. Andrew Sharp Anyway, what does that have to do with what we’re talking about now? They always drink sponsor beverages. They place just the right amount and gulp it down. Maybe that’s our trademark—the cool vibe. We aren’t actually sponsors, but we’re sponsors in our hearts. ### Netflix Angst Ben Thompson Here’s the first news item. You mentioned that the S.S. Sarandos has hit rough seas over the past 7 days. As you probably know, you were the one who said the ship had gone missing. I predicted that Netflix’s earnings would peak around mid-July, but the situation has gotten significantly worse since then. Let’s hear from Rav. Things haven’t gotten very bad, but bad news and negative reviews have been pouring in since last week. Andrew Sharp Rav wrote that Netflix laid off 6% of its employees. The stock price dropped significantly. The situation has gotten worse. It’s really gotten worse. Ben Thompson Netflix announced its earnings this week, and the company appears to be at a critical crossroads. Last week, 6% of the staff were laid off, including the head of content and the president of Netflix’s film division. Andrew Sharp “Dismissal” is a very appropriate verb here. I heard that the head of Netflix’s film division fired the head of content, and then he was fired as well. It was a really hectic week. Ben Thompson The Wall Street Journal cited data indicating that Netflix has reached saturation in the U.S. market and hasn’t gained new subscribers this year. Customer engagement has declined noticeably, falling 10% short of targets. The podcast and gaming businesses are proving ineffective. Meanwhile, Netflix has raised its base subscription fee 4 times over the past 5 years. It increased by 16% in 2025 and 12% in 2026. With customer engagement slowing, another price hike would lead to customer churn. So Rav asked, “What should Netflix do?” Andrew Sharp The acquisition of Warner Bros. was considered a fatal blow, but in retrospect, it was a desperate attempt to revive content and customer engagement. Should Netflix consider acquiring NBCUniversal? Netflix wanted Warner Bros. because of HBO, but NBCUniversal has sports content Netflix lacks. It offers Sunday Night Football, the Big Ten Conference, the NBA, the EPL, and the Olympics all in one package. NBC also runs an excellent theme park business, which would allow Netflix to implement a diversification strategy like Disney. Alternatively, Netflix could keep investing in its own content and wait for Skydance to self-destruct under its massive debt before acquiring Warner Bros. But should we take a quick look at how poorly the Ellison family’s core investments have performed over the past year? Larry Ellison’s Oracle stock dropped by 53%. David Ellison’s Skydance stock fell by 59%, and Joel and Joe’s Bryce Underwood’s stock has dropped by 99%. Ben Thompson Didn’t it go bankrupt? Andrew Sharp Oh, no. Western Michigan University—it was Western Michigan University, right? It was just like a government bailout for the automotive industry. It was thanks to the Big Ten Conference providing a bit more support. Ben Thompson Yes, that’s the only reason it still has about 1% left. Andrew Sharp I’m sure 98% of the audience understands, but while that’s a very specific college football joke Rav made, it’s also a very funny college football joke about Larry Ellison, Western, and Bryce Underwood. Ben Thompson Right. And look at Michigan’s record. Andrew Sharp Looking at the bigger picture, I think Rav’s email captures Netflix’s current situation quite well. We’ve both written a lot about Netflix, haven’t we? Rav wrote, “Given the declining usage trend, another price hike would lead to the terrible result of customer churn.” Ben Thompson Is that so? Andrew Sharp Well, that’s exactly the question. Netflix executives give funny answers every time they’re asked about it. Ben Thompson They do. I think I’ve mentioned this before, but everything they do has always been a strategy. They’ve been doing it this way from the very beginning. Andrew Sharp It goes back to when they said, “We will never advertise.” But now we’re acting as if we’re advertising. That’s the most representative example. In this case, I was a bit flustered. Previously, when asked about customer engagement during conference calls, they would gloss over it with something like, “Ah, blah, blah, blah.” But this time they said, “Yes, customer engagement is the problem.” Ben Thompson That’s what he said, honestly. To be frank, such a candid remark was unexpected. It’s not the usual image Netflix presents during earnings announcements. Furthermore, the conference call had a very controlled atmosphere. The fact that the Chief Investment Officer now reads out the analysts’ questions is at least an improvement. In the past, it would proceed with just one analyst coming on to ask questions. It was a very controlled atmosphere. Several analysts ask questions now, but a Netflix employee still reads them out. It feels as if Netflix has absolutely no intention of engaging. How can they proceed like this? Essentially, it’s one person asking questions on behalf of the public. Andrew Sharp Well, if the stock price keeps rising, they can get away with a lot. Ben Thompson Of course, I understand. But even now, no one can ask questions. You submit a question, and a Netflix representative reads it out. The communication style for these earnings announcements is extremely controlled. It’s always been like that. But this time— Andrew Sharp Yes, the level of engagement is the problem. The fact that they stated it so clearly implies there really is a problem. Ben Thompson Another point worth noting is that the questions were always about engagement. But this, too, was an answer controlled by Netflix. Andrew Sharp Even though they raised prices, the dropout rate wasn’t higher than usual. Ben Thompson Yes, that’s a good thing, of course. But it’s also a mistake. Netflix’s low churn rate has been the core of its business for the past 10 years. The U.S. market is already saturated, and that’s been a long-standing issue. Naturally, they have no choice but to raise prices to increase revenue. But once customer churn starts, it’s already too late. It’s fortunate that this hasn’t happened yet, but that doesn’t mean everything is okay. That answer effectively means, “Our last line of defense hasn’t collapsed yet.” But the fact that they’re not mentioning other issues is a problem. What I found puzzling during the call was the significant shortfall in advertising revenue. I thought the target was around $3 billion, but they said it would be $2.7 billion. They said, “We set an overly ambitious goal of 100% growth, and although we only achieved 80%, it’s still a very good result.” It is good, but growth was a bit slower last year because they had to overhaul the entire system. Andrew Sharp Yes. There may also be partnerships that aren’t ready yet, or that will take more time, so they want to get it right from the start. Those are all valid reasons. Ben Thompson But we’re on the call, and the engagement issue investors are talking about is real. Andrew Sharp Yes. And the engagement-based business model—that is, advertising revenue—isn’t growing. Ben Thompson It is growing, just not as much as expected. Andrew Sharp Right. ### The End of the Internet Ben Thompson I think there will be interesting things to watch for in the news about Netflix. They’re aware that things aren’t going well and are signaling that change is needed. I think the discussion will proceed in 2 directions: what Netflix can fix and what it can’t. The part it can fix is the content. The quality of U.S. content hasn’t been good enough recently, and Netflix seems aware of that. It also knows its brand image has been damaged by the chaos. Andrew Sharp Did you watch Stranger Things? Ben Thompson Yes, I did. They opened with Netflix executives as the main characters, but kept talking only about the content they were involved in. It seems that’s all they can do. Shows like The Queen’s Gambit were really good and won a lot of Emmy Awards. That was about 6 or 7 years ago, but they haven’t been able to replicate that success since. Speaking of Netflix’s pricing power, I think it’s important to have 1 or 2 popular dramas every quarter that everyone wants to watch, like HBO does. HBO doesn’t have a massive amount of great content, but it has enough to sustain the business. Netflix could do the same, but in recent years it seems to have focused more on quantity than quality. That’s been the case for at least the past decade. Netflix started by capturing people’s attention with unique, high-quality content. That was what it was known for. Another interesting point in the update was the discussion of Bela Bajaria, Netflix’s Chief Content Officer. One of her responsibilities was expanding global original programming. One of my favorite ways to insult people in China is to make up a swear word using 4 characters. I don’t know if I’ve mentioned this before— Andrew Sharp You have. Ben Thompson There are 4 adjectives, and you remove one of them and say, “This person is very…” The second and third characters are massive insults. It’s a truly ingenious swear word. Chinese people are really good at this. In this case, they praised Bela Bajaria for doing excellent work internationally, and then everything else they said was about America. It was as if they were focused only on that, which clearly revealed what they weren’t focused on. Andrew Sharp You mentioned that American content, if it’s well made, does well globally. Ben Thompson That’s right. I overlooked that aspect. They always promote programs that are popular locally. Here, “local programs” means programs outside the U.S. There seem to be a few Korean, French, or South American programs that are doing quite well. But American exports—movies that everyone watches, like old Hollywood films—remain strong. It’s almost taken for granted. So if the U.S. market is sluggish, the impact on the overall business is much greater than if a particular business sector in another region is underperforming. That’s important background to Netflix’s international success. In terms of content, they’re pouring massive amounts of money into it, hiring the wrong people, and making all sorts of strange choices. The Chronicles of Narnia movies seem to have completely flopped. Andrew Sharp Yes. Netflix could improve and run its business better. There are certainly aspects like that. Looking ahead, what’s the part Netflix can’t fix? Ben Thompson The size of the U.S. population—in other words, the size of the U.S. market—can’t be changed. There are 3 ways to grow: increase the number of subscribers, raise subscription fees, and show ads to subscribers. Andrew Sharp Yes. That’s precisely why the advertising business model is so effective. Ben Thompson Now it seems like everything might be misunderstood. I’ve long advocated for the advertising business model because it allows prices to be raised indefinitely. Andrew Sharp Yes. Ben Thompson If Netflix raises its service prices, people will eventually ask, “How much do I have to pay?” That’s the concern. If they’re charged $30 a month, many people will be dissatisfied that they have to pay a subscription fee just to watch ads. But there are 2 options: say, “This is too boring, so I’m just going to quit,” or raise the price. If they do that, they’ll lose subscribers. I want to provide a service to more people, not fewer. I think price elasticity is important. I’ve discussed this issue with AI companies, too. They thought it was absurd to run a subscription-based consumer business. It’s truly amazing how far they’ve come, but ultimately, people don’t necessarily want to pay money. Unless it’s absolutely necessary, they don’t want to pay at all. There are also situations like YouTube, where realistically there’s no way to charge fees, and cases where raising prices results in losing customers. In other words, price elasticity exists. With advertising, you can raise prices indefinitely without affecting the customer base. Of course, “indefinitely” is an exaggeration, but it explains why Meta continues to grow. You might think they have the same problem, since they’ve already saturated the market. But Meta keeps improving its targeting technology, increasing the value of its ads, and widening the gap with other companies. That’s why the advertising success story matters. Similarly, there are rumors that some unusual partnership has been successful, but those partnerships need to actually work and produce results. What is a growth story? If the growth story is nothing but price hikes, they’re bound to face a profit nightmare. Andrew Sharp That’s exactly my question about Netflix. I don’t want to underestimate Netflix. Another problem is that prices in other countries are much lower. Ben Thompson Yes, it’s much harder to make a profit in those markets. Andrew Sharp Yes, that’s right. Ben Thompson So if competition depends on securing engagement, and engagement is at the heart of advertising and the path to long-term growth, then—as I wrote about Netflix last July—it seems Netflix is fundamentally at a disadvantage compared with other companies. Andrew Sharp Yes, that’s the point I wanted to ask you about. It leads to bigger problems. The funny thing is, I thought I had a lot to say about Netflix, but we’re only halfway through. There’s still a lot left to discuss. You said one of Netflix’s problems, or one of the expectations around Netflix, is like waiting for the Sundance Film Festival to become hugely popular. Ben Thompson Yes. As I pointed out, Hollywood is—not Sundance, but Skydance. Skydance is a film festival established two years ago, but anyway. Andrew Sharp Skydance? Ben Thompson Yes, that’s right. Andrew Sharp The stock price is plummeting, too. Ben Thompson Yes, it was on that list. Andrew Sharp Ah, I got too distracted by the story about Underwood. Ben Thompson Hollywood isn’t rational. It’s so different from the rational image I had in mind. Sony adopted a strategy of focusing solely on content production and selling to the highest bidder, while others are saying, “No, we’re going to have a streaming service.” They plan to acquire Warner Bros., but they don’t seem to have a concrete plan for how to make a profit. I think Fox and Sony took truly rational steps. Fox is a studio that stepped out of the streaming business. Tubi, Roku, and services like that offer free streaming and focus on ad-supported content. It’s a really smart strategy. Sports content accounts for a large portion of their offerings. Andrew Sharp On the other hand, Sony is going in the exact opposite direction. They don’t have their own streaming service and say they’ll only produce dramatic content. I think other companies should have done what Fox did. Ben Thompson But no one did. Sony is still in this market. The problem is that if all the other companies had withdrawn, Netflix’s content problems would have resolved themselves. I thought Netflix lacked strength in producing original content. That was a bridge to a world where they could once again secure good content from the best creators. Andrew Sharp That’s right. And in that situation, they’d gain bargaining power. It feels like everyone is still caught up in an irrational situation. Ben Thompson But they’re excellent content creators, after all. Maybe that’s related. Netflix is good at business, so they were waiting for the others to show up, but in the end, they didn’t. I interpreted the Warner Bros. crisis that way, too. Andrew Sharp “You have to sell everything to us.” Ben Thompson “Okay, then we’ll buy you, so you have to sell to us.” That was the idea. That’s why I called it Hollywood’s ultimate goal. They were trying to force the outcome I considered the ultimate goal. I still believe those results should come about, but the problem is that no one knows how long it will take. It’s already taking longer than expected. They need to achieve continuous growth and keep developing to maintain high stock prices. All of these factors influence corporate management. Andrew Sharp Is acquiring NBCUniversal reasonable? Ben Thompson Of course. Andrew Sharp Yes, but they seem to have run out of ideas before they can even start that discussion. Ben Thompson Yes. The really interesting point is sports. They’ve been investing much more in sports recently. Sports are true premium content. Even 1 major event a month can keep subscribers at a certain level and help prevent churn. Sports play a significant role in the multibillion-dollar advertising market. They’re still the best advertising platform. However, companies have an allergic reaction to sports because the structure allows sports leagues to take the majority of the revenue. You can’t tell yourself, “Eventually, costs will go down as people close down businesses.” It’s always been that way. Rupert Murdoch’s exceptional ability when he acquired the NFL—frankly, I’m not sure if Fox actually made money from the NFL—is precisely why we call them the “Big 4” rather than the “Big 3.” Fox earned billions of dollars thanks to the NFL. I don’t know whether they made a profit from the NFL package alone, and I don’t think they made a lot of money from the NFL itself. But thanks to the NFL, Fox grew into a true network and enjoyed all kinds of benefits from it. Andrew Sharp Netflix is probably thinking about that, too. They’re wondering how to build a business that benefits the overall operation. Netflix is currently trying to increase viewer engagement by producing podcasts, cooking shows, and internet-native content, but that didn’t come up on this call. You heard the whole thing, but according to the notes I saw, they didn’t mention podcasts or video games at all. Ben Thompson No, actually, it was the exact opposite. They said, “We’re investing all our money in important areas.” Don’t worry. “I’m leaving about 5% behind. Don’t worry about that part.” That’s what they said. I think people viewed that negatively. Andrew Sharp Are you saying you’re going to solve the problem with a Ringer? Ben Thompson That was the reaction. Yes, and the strange thing is that just 6 months ago, those things were all points of emphasis, but now they aren’t at all. Andrew Sharp Yes, that’s right. But their strategy has always been the same. They improvise to fit the situation at hand. Even though things have changed 180 degrees, they say, “We’ve always done it this way.” Ben Thompson It seems like that’s what they’re saying. From the perspective of the broader ecosystem, the extent to which Netflix relies on engagement to create a growth story suggests that its growth story isn’t as compelling as it used to be. The problem is advertising—the advertising model. In the long term, Netflix’s growth is increasingly dependent on advertising, which means engagement. But the way people consume entertainment these days is also a problem. Meta is a true competitor to what Netflix is trying to do. Honestly, that’s the real problem. TikTok and Reels are swallowing everything up. How many people watch Meta Reels every night? A huge number of people choose Meta over Netflix. I think this is the problem Netflix has faced over the past few years: the way people consume video has changed. It’s another irony. Andrew Sharp Actually, I found out how good the audio in this room is because I did a podcast with my daughter. I didn’t make it public, but I thought it was pretty good. I really liked it. My daughter was great, too. And my daughter— Ben Thompson She watches a lot. Andrew Sharp Yes. I didn’t ask her directly, but she said her daughter spends time watching Reels every night. Ben Thompson Yes. It just occurred to me—that’s a perfect example. A brilliant idea struck me: my wife watches Reels every night, too. She just sits there fiddling with her phone. I asked, “What are you doing?” If I ask that, my wife doesn’t really know. Andrew Sharp If that kind of thing is included in a growth story, that would be the backlash, right? Ben Thompson Yes, that’s right. Let me tell you another story related to the streaming world. I came across it by chance, and I was really surprised. This week, The Hollywood Reporter asked, “Is a massive deal imminent between David Ellison’s Skydance and Elon Musk’s SpaceX?” Media mogul John Malone thinks it’s highly likely. Malone said, “It looks like the deal will go through,” and cited a specific investment range of $8 billion to $10 billion. He predicted, “Skydance will sign a global distribution agreement with SpaceX, and SpaceX will invest to reduce Skydance’s debt and lighten David Ellison’s burden.” That’s because Ellison is burdened with massive debt. Malone added, “It’s still unclear exactly what SpaceX will gain from this deal.” Malone, who brokered the acquisition of Warner Bros. Discovery alongside David Zaslav, highlighted the relationship between Musk and Larry Ellison, David Ellison’s father. “Who helped fund Elon when he acquired Twitter? It was Larry Ellison,” Malone pointed out. How did Larry Ellison raise the funds to invest in founding Skydance? Tesla stock. I’m confident there’ll be an announcement soon. But the news came out on Thursday morning. I didn’t know about it this morning because I was busy getting ready. Andrew Sharp Well, first of all, what John Malone says is practically the truth. That’s why I clicked on the article. If John Malone says it, it must be true. Ben Thompson That’s what I thought. Andrew Sharp You’re right. That might sound a bit lukewarm. I know they’re close, but anyway, the news came out on TV: Elon Musk is investing $1 billion in Skydance. It’s not $10 billion, but it might turn out that way. I’m not entirely sure what SpaceX will gain from this investment. Is this news about Elon Musk’s investment, or is it about an investment Elon announced today, Thursday, while we’re recording? Ben Thompson The investment in SpaceX is almost unbelievable. This vicious cycle—I really don’t know what on earth is going on. When I first started writing, I hardly wrote about Tesla, but people don’t seem to wonder why. Even before the political situation became particularly heated over the past few years, writing anything related to Elon was like writing about a sensitive political issue. Elon’s die-hard fans are like, “It’s a six-dimensional chess game. You either see it or you don’t—it’s one or the other.” Andrew Sharp Right. They might be right, but that doesn’t make them any less annoying. In fact, the more right they are, the more annoying they are. I guess that can’t be helped. Ben Thompson Anyway, I wrote about Tesla. When the Model 3 was released, I wrote an article titled “It’s Tesla,” and orders flooded in overnight. Finally, an affordable Tesla had arrived, and it became explosively popular. I talked about how they built their brand and how it bore fruit. But the following week, they signed a ridiculous deal with a company like Solar Thing, run by Elon Musk’s brother-in-law. I thought, “This is total madness. I don’t want to write about this. It’s not worth writing about.” That’s what I thought. I write about Elon Musk about once every 3 years. Andrew Sharp That’s right. I know it well. So you’re saying that if SpaceX invests here, the same situation will occur? Ben Thompson Yes. I read it thinking that something like that could happen. When I look at Skydance and Elon Musk, at some point I just give up. The debt Skydance has taken on is truly enormous, and I have no idea how they’ll handle it over the next few years. But maybe they’ll find a way. Maybe Elon Musk will be part of that story. Time will tell what happens to the streaming industry. As I mentioned earlier, Ben, today is sponsored by Stripe. This week, Stripe announced that they have become a sponsor of the Mercedes F1 team and the first sole sponsor of Stratechery. Mercedes always has dozens of sponsors, but Stratechery has never had a sponsor until now. The podcast Sharp Tech was very successful, and the subscriber acquisition rate was also very high. However, our hypothesis that advertising would increase new subscribers did not actually work well. Choosing Stripe was part of that calculation. Without Stripe, we would never have been able to solve things like the payment system. It is thanks to being able to stay in the media industry that I am able to be where I am today. So I owe a lot to a platform called Stripe. I’ll continue with some news from the cyber world. I don’t know where to start. This tweet is pretty good. It says 8 different cybersecurity issues are emerging. How many did you write down? Andrew Sharp I read the NSA announcement this week, and it said, “Effective immediately, all organizations using PHP in their systems…” Did you see the article about elliptic curves? Is that another interesting piece of news from the NSA? Ben Thompson No. Elliptic-curve cryptography is a type of encryption, but it has nothing to do with elliptical trainers. Andrew Sharp No, it isn’t an elliptical trainer. Ben Thompson Basically, you need a seed value to generate the curve, which allows for efficient data encryption. It’s a much stronger encryption method than using hash functions. The idea is to encrypt data using a public key and a private key. Encryption is easy, but decryption is difficult without the correct key. This is called elliptic curve cryptography. It depends on a specific seed, and the question is where that seed came from. Andrew Sharp And I heard those seeds came from the NSA. Ben Thompson Oh, that’s surprising. It is an encryption method. No one there remembered what the seed was. I asked, “How are these seeds selected? Is there something going on?” Andrew Sharp There doesn’t seem to be any reason why the seed wouldn’t be important to the encryption method itself, but maybe there’s something we don’t know. Ben Thompson The NSA might have decoded it. Bitcoin uses elliptic curve cryptography, which is different from what others use. The same goes for Ethereum. Andrew Sharp That’s because people thought the NSA was behind it. Eventually, people started talking about Google’s AI doing things randomly, and everyone has heard phrases like that that sound like jokes. Let’s think about it again. Let’s just forget about it. Based on speculation, let’s think about how Claude, or a model like Claude, created this cipher. Ben Thompson Yes. If you combine a standard pseudorandom number generator with a specific date and time—the time the seed was generated—you can identify the source. Andrew Sharp Ah. So the NSA just ran a program to generate a seed number and handed it over. Ben Thompson So the speculation that the NSA did something suspicious is a misconception. There were just no problems. Someone simply ran the program at a specific point in time and passed along the seed number. That’s it. This might be the safest news among this week’s updates. Andrew Sharp Other news related to the NSA is— Ben Thompson I’m sorry, I couldn’t finish writing the tweet. Andrew Sharp All organizations using PHP in their systems must prepare an update to address 2 serious vulnerabilities. PHP is widely used in web applications. These vulnerabilities often provide a path to direct access to the server’s file system or database. If immediate updates aren’t possible, the organization recommends taking the system offline until the problem is completely resolved. The NSA is scheduled to release more specific guidelines soon. Ben Thompson As I mentioned, this is one of several quite ominous situations. You resolved this issue, right? Andrew Sharp Well, I didn’t handle anything regarding PHP or security certificates. My website hasn’t gone offline either. sharptext.net is still operating. Ben Thompson What do you think? Should I take it offline? Andrew Sharp sharptext.net is a WordPress site. Do you have a PHP problem you haven’t resolved yet? Ben Thompson No. I don’t know how to solve this. Are you trying to scare me? Andrew Sharp Don’t worry. It’s already been resolved. Ben Thompson Thank you very much. I didn’t solve it myself. Andrew Sharp However, various things happened this week, some of which may or may not be related to AI. In particular, this PHP-related incident is a bit absurd, and there’s another story about certificates. Ben Thompson Yes. This incident is truly absurd, but I’ll talk about PHP later. Another story is about what happened at a company in India. Andrew Sharp For a certificate to be issued, there has to be a fundamental root of trust, whether it’s an encryption issue or something else. We’ve talked about this using smartphones as an example, right? Eventually, you have to trust Apple. Ben Thompson All encryption ultimately has to come down to something fundamental. For online transactions, how can you have a trustworthy transaction at a place like Amazon? The certificate issued by a certificate authority fulfills that role. These are authoritative certificates that everyone recognizes, and they’re embedded in browsers and operating systems. Andrew Sharp Websites also have encryption keys, and you can obtain keys very easily using a service like Let’s Encrypt. However, all of this is based on a root certificate that everyone agrees on. If you have a key that matches this certificate, it’s considered safe. For example, when you visit Amazon.com, a lock icon appears in the browser. If a warning that says “This site is not safe” appears when you visit a site, it means the site doesn’t have a certificate issued by a recognized certificate authority. Ben Thompson This was a certificate issued by a certificate authority in India, but it’s unclear exactly what happened. It’s said to have been a software issue, but these encryption keys are supposed to be 256 bits. In other words, they should consist of 256 unique numbers, letters, and symbols. But the number used in this certificate was 4,127. That makes decryption much easier. It seems they misinterpreted it. Andrew Sharp I really can’t believe that 256 bits are represented by numbers between 0 and 255. Ben Thompson I can see how disgusted you look. I really can’t believe it, either. And the question is, what kind of danger does this pose? Andrew Sharp First, update your browser to the latest version. All browsers have been updated to resolve this issue. But look around: How many devices are connected to the internet in this office? Ben Thompson Oh, my God. Andrew Sharp I’m worried about IP address management. Of course, managing IP addresses with things like VLANs is difficult. But most internet-connected IoT devices likely have built-in trust certificates. Will those certificates be updated? Ben Thompson Yes. So this certificate issue will continue. It means you can pretend to be someone people trust. This problem will continue forever. The incompetence of one company will leave permanent damage to the internet. Andrew Sharp Returning to the PHP issue, the PHP Foundation has been distributing patches for everything since version 8.2. I recall that version 8.2 was released in 2022, but millions of websites and services are still using older PHP versions. Will it update immediately if I’m using the latest version? Ben Thompson This bug is so severe that someone can take over the system almost immediately by accessing a site running it. That’s really serious. That’s why the NSA is tweeting about this issue. If you haven’t updated it yet, take all your services offline. Andrew Sharp Yes. A significant number of these are old. Ben Thompson What’s really interesting is how political, social, and technological aspects are intricately intertwined in this problem. The internet has connected everything, and everything is becoming globalized. The connection and globalization of everything will be what brings down the internet. That’s the most vulnerable part right now. The internet sowed the seeds of AI and provided all the content necessary for AI. Now AI is swallowing up the internet. It seems as though humanity has poured too much into the internet and driven itself to destruction. Andrew Sharp A few years ago, there was significant controversy and backlash regarding the U.S.-led internet management body. The U.S. was saying, “I should have checked beforehand.” There was an internet management body controlled by the United States, and although I don’t clearly remember whether it changed or was abolished, it wasn’t popular worldwide at the time. Ben Thompson Yes, that’s correct. But looking at this situation, I wonder if it was really a good idea to allow the issuance of certificates that the whole world can trust. Who would trust that certificate? Of course, that’s a biased remark from an American perspective, but this is exactly the point I want to make. Because of how it’s built, the internet requires tremendous trust from countless people and organizations. And that trust might not work properly. Andrew Sharp That’s especially true now that AI has emerged and can exploit any vulnerability. AI can detect these vulnerabilities. Ben Thompson So let me make it clear: there are other cases. That’s not because of AI, but purely the result of incompetence. I haven’t looked into the PHP vulnerability in detail, but I think AI helped discover it. AI will find many more vulnerabilities in the future. The biggest lesson I learned from this incident is connected to the experience of once again discovering a vulnerability because of my own foolishness. Andrew Sharp Yes. Ben Thompson The vulnerability was discovered by a tool called Quad. Everyone probably says, “I don’t want to unleash an AI agent on my computer. I can’t trust it.” You’ll think that. But we’re already rapidly approaching an era where it’s considered insane not to have AI agents monitoring everything. Andrew Sharp It was Quad that discovered that very vulnerability. Ben Thompson Are you talking about vulnerabilities? Andrew Sharp No, it’s just a general point. There are countless vulnerabilities in the world. What I just mentioned was simply an example of an AI agent actually protecting a network. Ben Thompson Of course. And that was a kind of coincidence, though. I have a rack, you know. I’ll show you later. Did you see the rack? Andrew Sharp I went to another room and looked. It’s a really good rack. Ben Thompson Yes, it’s probably a good rack. As I mentioned before, I’m keeping all of this offline as much as possible. It’s hidden behind Tailscale. I don’t want anything exposed on the public internet. Andrew Sharp I shouldn’t have something like that in my house. It’s only natural to leave that to the experts. Ben Thompson Oh, and my Linux version had an old certificate. I don’t know if I did something wrong or what, but I didn’t install it. I probably need to fix it, but I’m not sure when. Andrew Sharp It was issued, but I needed someone to manage the situation on a regular schedule. There was already someone in charge of that. In addition to regular updates, we needed someone who could keep track of all these situations. The thought, “No, I can’t believe it,” is wrong. You need to stop believing you can handle it yourself. You have to let go of the reins, or something big will happen. There are numerous threats and potential vulnerabilities. Of course, everyone needs to actively look for these bugs. Ben Thompson Yes, that’s right. But it’s difficult to do a podcast about this topic right now. Several attack vectors were highlighted this week. Andrew Sharp There aren’t that many. There are about six or seven cases in progress. So I’m cautious about using vague expressions like “the situation is getting worse.” But as I read the headlines, I do get the feeling that some cracks are starting to form. That kind of atmosphere is taking shape. Major changes are coming. The situation is going to get worse and worse. Ben Thompson Yes. It feels like the end of the internet. I should make an old internet—I mean, a WordPress site. The kind of internet where people do that. It used to be like that. Andrew Sharp I’ve run several WordPress sites for years. I should run my own email server. Ben Thompson I’ve done that, too, but that ended a long time ago. Emails aren’t delivered unless they’re sent by a major company. The open internet, the promise of connecting to millions of nodes and being able to connect with anyone, and things like BBSs hosted on someone’s basement server—all of it came to nothing. We were lucky. If you understand even a little bit of what I just said, you should consider yourself really lucky. That was an era, and it will never return. Andrew Sharp You can never come back. Ben Thompson I can’t come back. So what will the new internet look like? Andrew Sharp For example? Ben Thompson You can’t solve it by patching it up. Absolutely not. That’s how everything is. Honestly, at this point, I don’t really feel any regret. The internet was kind of a trash can for a while. So it’s okay. Some of that comes down to the economic factors described by agglomeration theory, but there’s also a demand for centralized control. It’s not just that, though; the structure of the internet itself is the problem. It’s a structure where only a relatively isolated, very eccentric minority can access the internet. It’s like people with similar ideas gathering in an environment like the Garden of Eden. It’s the same on all social networks. If you start small and everyone joins, the disadvantages will outweigh the advantages. Andrew Sharp That’s right. Ben Thompson And what we’re trying to do there is… I don’t really remember who’s who, but I’m talking about the science-fiction author who wrote 47 books. Among all those science-fiction novels, one of the most famous is a story about virtual reality. This is driving me crazy. Thousands of people are shouting out the title right now. Andrew Sharp I don’t know who it is. I’m not a sci-fi fan. Ben Thompson I’m drawing a blank. It’s about virtual reality. Do you remember William Gibson? I just checked the chat. It’s not William Gibson. It’s not Ready Player One, either. No, it’s one of the other writers. Guess. Andrew Sharp Kurzweil? Ben Thompson No, it’s not Kurzweil. He writes novels, you know. I can’t believe it. That’s a really fun TV show right now. Sorry. All of this is being broadcast live. This is the new era. It’s not Asimov. Anyway, one of the most famous books about virtual reality came to mind, so I’ll type it on the screen. Listen carefully. It’s set in a cyberpunk world, and people live in various countries. It’s shaped like a nation, but it’s completely decentralized. For example, there are regions like Hong Kong and regions like the United States. The areas in between have been heavily fortified and closed off. You can’t enter unless you’re a citizen or a member of that country. But inside, it’s a beautiful, pastoral landscape. The area in between is like hell. It makes me imagine what the internet would look like. That’s right. Come to think of it, social networks seem to be like that now, too. Group chat is the best social network, isn’t it? It’s highly reliable. It’s similar to what we’re using now. It’s a much more intense version of the way we used to behave on social media. In other group chats, you act like you’re preparing for war, go out to Twitter to wage battle, and then retreat to lick your wounds. The world is quite dystopian. Tweets go viral, you leave replies—that’s basically the internet in general. It’s like… so I’m making something like this. Andrew Sharp Yes, Neal Stephenson. Thank you. Neal Stephenson—I couldn’t remember the title of the book. Ben Thompson This must be satisfying news for all the listeners who felt like they were going crazy repeating that name, right? Ah, Snow Crash is the title. That’s where he coined the term “metaverse.” The metaverse originated there. I heard it’s a good book. Andrew Sharp Yes, the novel I was talking about was Snow Crash. But this is the internet. It’s like I’m building my own version of all this. We have a few small apps under development at our company. For example, Tailscale is like our own little barrier. When you log in, you become part of it, and nothing is exposed externally. It feels just like my own little fortress. In the future, these small fortresses will spring up everywhere on the internet, too. Just like in a cyberpunk movie, agents who are always on high alert will patrol and engage in combat. I just hope it never gets breached, so the internet doesn’t collapse without us knowing. The Garden of Eden, where everything was free like it used to be, has disappeared. The internet we encountered while growing up is gone now. You might still be able to access websites in the future, but the economic model is already quite unstable, isn’t it? Think about whether we’ll really miss what we have now, or what we had in the past. After all, the quality of the internet has dropped significantly anyway. Ben Thompson That is exactly the part I’ve been worried about for a long time. Everyone is afraid of the future. I think maintaining the current situation is actually frightening, because the current situation is the worst. The problem is looking back at the past and thinking, “I need to stop this downward trend.” But the idea that you can go back to the past is wrong. You can never go back. Moving forward is the only way. Don’t stay stuck in the worst-case scenario; consider the situation in the cybersecurity community. Andrew Sharp It’s true that the current situation is the worst, but we’ll have to wait and see how things turn out. Ben Thompson No, on the contrary, it’s getting worse. Andrew Sharp Do you think so? Ben Thompson Yes, I completely agree. It seems like cyberattacks are accelerating. What will be the aftermath of the attacks currently taking place? For example, there was a railway hacking incident, and this week a developer site was hacked and the account information of everyone who used the site was leaked. Andrew Sharp That’s right. That was one of many stories. Ben Thompson Yes, there’s a lot of user data. Andrew Sharp The same goes for developer data. You can use those credentials to break into other apps or websites unless you replace all of them. Replacing them is a huge task and a real headache. As this problem continues to spread, it will become increasingly serious. We’re in a situation where the dam is slowly collapsing. Ben Thompson Yes, that’s right. It’s like a small wave crashing over the dike. Andrew Sharp The tsunami… That’s really reassuring. Just to mention one thing, Axios published a big article about banks being in an uproar over agents accessing bank accounts. A significant part of that article was about people delegating access to their bank accounts to agents. The article title was really scary. I’ll put a link in the show notes. Ben Thompson I delegated access to my bank account to Muse. Take a look. Andrew Sharp Of course. It’s one of the really useful apps. It’s really great. When it comes to technology, it’s either a complete zero or a hundred. I’m a huge fan of Muse. ### Meta's VR Glasses Ben Thompson Please leave a review. How were Meta’s new VR glasses? When I went to San Francisco last week, I had the opportunity to try them out. They’re a really amazing product. As a Vision Pro user, I still prefer the Vision Pro, though. The reason I call them an amazing product is that the resolution is truly astonishing. It’s really amazing that such resolution can be achieved in such lightweight glasses. But the problem was that they felt too light. It felt like being in the uncanny valley. If you’re using them for entertainment, you want them to completely block out light and have a heavy feel, right? At least when I tried them on, the fit wasn’t very good. I had really high expectations, and while they were okay, I wasn’t very satisfied. Andrew Sharp You’re a total Apple fanboy. Ben Thompson I can’t believe it. No, it’s not me. You just said they weren’t heavy enough. Listen carefully: “I felt like it was going to fall off my ear,” he said. Andrew Sharp Hmm, it wasn’t as thrilling as I expected. Actually, it would have been better if there were a headband. Ben Thompson That’s right. You just rest it on your ear, and it never falls off, but I always felt like it was going to fall off. That’s why I was even more anxious. Andrew Sharp I agree. Ben Thompson That’s right. And it’s harder to immerse yourself. Andrew Sharp That’s right. So I think I heard there would be an attachment device. Does it have a complete blackout function, too? Ben Thompson It seems like there’s a complete blackout feature when you use the headband, but aside from that, it’s much better than the Vision Pro in every aspect. The biggest difference is that the resolution is slightly lower, and you can definitely tell. Even the Apple Vision Pro doesn’t have enough resolution. The resolution is sufficient for reading text, though. I thought it would be great to use the Vision Pro in an airplane seat. It felt like being detached from reality, and it reminded me of sitting in the back of an airplane. I think it would be great to have the Vision Pro. You might be able to use your laptop in another seat on the plane, though. I used 4 monitors—actually, up to 5, because it was also connected to the TV. I’d love to be able to carry multiple monitors around like this. I don’t think the Vision Pro will work for that because it’s too big. Its size is a bigger problem than its weight. Even folded to its smallest size, it doesn’t fit in a suitcase. Andrew Sharp That’s right. I know that, too. It’s a real problem. Ben Thompson I think it’s very good. Andrew Sharp Is that why you agree? Ben Thompson Yes, I agree. Andrew Sharp It looks more unstable than it needs to. They’ve been sitting here the whole time. Ben Thompson It looks like I’m sitting there wearing a headband. Andrew Sharp Yes. Ben Thompson You might have noticed I was wearing VITURE glasses. I’d like them to be a bit tighter, though. Mine have never come off. Andrew Sharp Yes. Ben Thompson I was really disappointed. I was suddenly invited to an Apple event, so I had no choice but to go. It was the Apple and Meta collaboration event I wrote about this week, so I had to leave you home alone. Before I left, they asked me to play the Beat Saber demo and write down my score. Andrew Sharp I had absolutely no plan to share this story. You’re going to kill me now. Ben Thompson I can’t believe it. I asked, “What was your score?” When we went out to dinner that evening, I asked, “What was your score?” Andrew Sharp I didn’t participate in the Beat Saber demo. The Meta team members are amazing, and I want to thank them all. I’m not a gamer. I don’t want to do that. Ben Thompson I don’t care. But when you actually get up there and don’t get a score, you feel like a fool, don’t you? Andrew Sharp The reason I’m good at podcasting is that I’m humble. Ben Thompson You tell me it’s okay to tease you, and you take it all in stride. The humility you showed in Beat Saber was really annoying. Andrew Sharp That’s right. It seemed like Ben had permission to tease you, and that was really fun. Ben Thompson You really… I’m so flustered that you’ve suddenly become a joke. I can’t believe I ended up getting kicked in the butt in a children’s game that Ben was obsessed with. I’m not going to play Beat Saber with the Vision Pro headset. Andrew Sharp Look, the difference with the Vision Pro headset is—it wasn’t the Vision Pro. But Apple made it, you know. Ben Thompson Yes. Andrew Sharp Meta’s glasses. Ben Thompson There must be a lot more content, and that’s important. In my opinion, the eye-tracking and hand-gesture recognition were much better than on Apple’s products. Andrew Sharp Yes. Ben Thompson For example, looking at a dot and looking around works exactly the same as on Apple’s products. I always end up missing at least one detail with Apple products. I guess it’s because I moved too fast. But Meta’s products recognized my movements immediately, just like Apple’s, so it felt like technology that was at least 2 years newer had been applied. Andrew Sharp Of course, that would be the case. It hasn’t been released yet. It’ll probably come out next year. Ben Thompson I think I’ll definitely buy one for travel. Andrew Sharp Right? The Vision Pro is hard to use when traveling, isn’t it? You can wear these glasses when traveling, and there’ll be much more sports content than on Apple’s products. Ben Thompson Now that I think about it, I was traveling and had to record. I planned to record somewhere else, but it didn’t work out, so I ended up recording in my hotel room. I carried a large laptop around. Andrew Sharp Yes. Ben Thompson I thought I should have just carried the Air around. Andrew Sharp Yes. Ben Thompson This product is too big. I’m really looking forward to it, but when I travel, I have to carry it around. Writing takes up a lot of screen space. Andrew Sharp I like to work with a lot of reference materials open. Ben Thompson It’s not an ideal screen, but it’s the largest screen I can get, so I carry this big computer around. I’m really looking forward to being able to carry a small computer and write with Meta’s glasses whenever I need to. Andrew Sharp A hundred percent. The Vision Pro wanted to do that, too. Ben Thompson It’s too big. Andrew Sharp Yes. Even so, that’s exactly why you like that product. It’s really fascinating. Ben Thompson I think so, too. Take a look. I have no intention of walking around and watching anything with Meta’s glasses. Andrew Sharp I might have to buy one, too. I should check how much it costs. We’ve completely gone off in a different direction. Ben Thompson It seems like it’s because of the Meta glasses. We’re focused on the bots that mention Muse and all the agents within the system. I think a significant number of those agents seem to have been delegated by real people, and it doesn’t seem like a large-scale hacking scandal like the one in the Axios article. So we don’t put it in the same category as everything else we discussed this week. Andrew Sharp Ah, that’s really a shame. That’s my cell phone. It’s not real-time. Wait a minute. That’s a good video. Ben Thompson I’m really glad it wasn’t my cell phone. Andrew Sharp Did you set an alarm by any chance? Ben Thompson I wanted to. I thought, “Ah, I shouldn’t carry a cell phone.” I wanted to. I think that should be placed to the side. Andrew Sharp After that, I had to go pick up my son. Here it is. Ben Thompson Good. Shall we continue? We have to keep going. I’ll try not to lose my way. ### Anthropic Alignment Andrew Sharp Great. Joseph says: “Putting aside the absurd story about Ben, Andrew, and Anthropic creating a silicon god for a moment, it seems Anthropic’s unique product differentiation is becoming apparent. Claude is always Claude. It’s singular, massive, and omnipresent. You act like Claude on Slack, work with Claude Code, and converse via Claude Chat. Anthropic allows you to always communicate with Claude. “Compare that to Grok Bot, Dotz, and Muse. Each allows for a certain degree of customization. Muse is the most personalized product among them. My Muse is a robot dog named Muff, who wears a call-center headset and displays small tasks in an animation. It’s really cute. Even as all the labs are copying each other, this feels like the first difference in our product philosophy. “Would people prefer Claude, an agent present everywhere, or agents specialized for specific tasks, like Grok Bot, Dotz, and so on, or personalized agents like Muse? “P.S. In Ben’s experiment, did Ben update Muse, or is he using the default version, Jolly?” Ben Thompson I don’t know what the last part means. I don’t really know the name Jolie, either. I named my Muse “Muse.” Andrew Sharp Me too. Maybe it’s just because we’re boring white men. Ben Thompson I think that might be the case. I always do that whenever there’s customized content. When I could name characters in old video games, I just gave them names that suited their personalities. Andrew Sharp Yes. I want to experience it exactly as you created it. I want to go and experience it. I don’t want to feel pressured to create it from scratch. Ben Thompson Muse is very useful for helping with flight reservations for our upcoming Sharp Tech travel, though I haven’t booked my flight with Muse yet. Andrew Sharp What if I missed my flight and it was Muse’s fault? Ben Thompson That could happen. Andrew Sharp The good thing about doing a podcast like this is that everything is content. Whether a problem with an airplane comes up, gets resolved, or gets worse, we’ll tell that story. It’s going to be really fun. That’s one of the good things about it. Ben Thompson Yes. I think calling Muse “Claude” fits well with this philosophy. Andrew Sharp It seems like they think they’re creating God. The name of the god is Claude. Ben Thompson They say God is infused in all their products, if they said so. Andrew Sharp I always thought the name came from Claude Shannon, a very important figure in computer history. Ben Thompson It really does sound like a god. Honestly, it just occurred to me that I’m curious whether that’s a coincidence. Andrew Sharp Yes, it’s a bit annoying. Ben Thompson Claude is simply a different being from what I’ve experienced. Every token feels like a completely new experience. That is exactly the essence of an LLM. That’s why I find it bothersome to anthropomorphize technology and machine intelligence. Andrew Sharp I don’t like this personification. Ben Thompson Yes. I think it’s better to go in exactly the opposite direction. To some extent, it could be called personification—something that gives you a personal feeling. Andrew Sharp I like the way Muse handled this aspect. We all talk about alignment and safety. The essence of text creation is so closely connected to humanity. I think that’s precisely why these things feel human: they operate in the most human way possible. They literally operate based on human language. Ben Thompson In my opinion, the core of this theory is that artificial intelligence is taking over our higher faculties. Will it really be able to come back down to the human level? What makes us human are the animalistic parts, such as instinct, desire, and impulse, which are connected to our cerebrum—that is, to higher-level intelligence. Artificial intelligence is focused only on that link, the top part of the brain. There’s no part like the brainstem that provides the driving force that actually makes artificial intelligence work. The reason the name GPT is truly appropriate is that artificial intelligence is so appealing that it’s easy for people to feel as if they’re conversing with a real person. It’s important to keep reminding people that artificial intelligence isn’t real. However, Anthropic takes exactly the opposite approach. We’re trying to make artificial intelligence realistic and teach it realistically. Their perspective on alignment isn’t to control Claude, but to teach Claude to behave correctly. Yes. They think it will control itself, and I think that’s a fundamental divide. Corporate-level alignment—or misalignment—is exactly what you’re describing. Andrew Sharp I think so. We should try to treat these as tools and control them. And there’s good news: it turns out LLMs are easier to understand than we thought. There’s a very interesting paper on interpretability and what it means to analyze and understand LLMs. Ben Thompson That’s really good news. Andrew Sharp Yes, it is. The really funny thing is that some people in AI safety dismiss the paper as soon as they see it, because it deals a big blow to their perspective. Ben Thompson You’re right. This paper overturns the existing claim that we can’t see inside LLMs at all. It’s useful: if you understand how LLMs work and find that the initial results are surprisingly good, you can use that to improve our understanding. Andrew Sharp No, actually, these models are much easier to understand. The reason we couldn’t understand them before is that we lacked the tools and capabilities. Ben Thompson Right. They’re not as much of a black box as we thought. The output is cleaner. I think “neat” is the right word. Andrew Sharp This is good news. What we need to pursue is the ability to continuously control them. The explosive power of a nuclear bomb is much greater than that of my fist. The idea that something could be beyond our capabilities isn’t strange. Ben Thompson That’s right. Andrew Sharp It’s as if we… And I think Silicon Valley is one of the causes. People there are too deeply immersed in their self-image and their values around intelligence. Ben Thompson Yeah. Silicon Valley people have always thought of themselves as smart, so the thought that there’s someone smarter than them is overwhelming. They suffer a major mental shock. On one hand, they fall into nihilism: “Everything is over.” On the other hand, they think it’s okay if it’s a god, because God can be smarter than them. Andrew Sharp If you keep doing that, you end up in a really strange situation. I think that’s wrong. Ben Thompson I think we need to move in the direction of creating these tools and making them controllable. Part of that process is helping people think this way. Andrew Sharp Yeah. Ben Thompson Anthropic’s philosophy goes in exactly the opposite direction on all these points. As a counterpoint to this conversation, Opus 5.5 is truly amazing. I use it for everything, and in my experience Quads are much better at agent-based tasks. Andrew Sharp Yeah. Ben Thompson That’s because multitasking works better, and you can track different situations simultaneously. ChatGPT tends to fixate on one thing and focus on it too much. Andrew Sharp I’ve never experienced that problem. Ben Thompson Yeah, I agree. I think people need to consider whether Anthropic is aligned with humanity’s best interests—that is, how they view these tools and explain them to the public. But their brand image for Claude seems much more consistent than any other company in the field. Andrew Sharp That’s absolutely true. Honestly, I don’t have many complaints about this. It sounds like it’s being said at a corporate level. Ben Thompson No, this is similar to what I said last week: “Do I have to be replaced? Are you out of your mind?” That’s what I’m doing. But what on earth are the other companies doing? Andrew Sharp There are as many as 8 products. From a consumer’s perspective, how am I supposed to manage them all? Ben Thompson It looks like Anthropic’s IPO will take place next week or the week after. I was in a panic when I heard the news this week that the S-1 documents had been submitted. Andrew Sharp I know. It seems like various media outlets are reporting on this selectively. Couldn’t they just disclose the S-1 documents? Are they going public? Just give the presentation. I won’t write about that part. Ben Thompson The S-1-related articles in The Wall Street Journal and Reuters aren’t something I should write about. Andrew Sharp It has nothing to do with the topics we cover on the podcast, but it’s really great. All right, let’s get started. It would be really interesting to take a closer look at Anthropic’s actual figures. I saw an article saying it might be announced on Friday. Who knows? ### Why Apple Has Retained "Siri" Ben Thompson Kyle asks: “Everyone, here’s another branding question. Why does Apple insist on a brand name so tainted by Siri? Apple’s AI is brilliant, simple, and capable of generating all kinds of advertising synergies. If it succeeds, Apple becomes synonymous with great AI. Even if it fails, there’s nothing to lose. Furthermore, ‘Hey Apple’ is an opportunity to make a fresh start by leveraging a beloved brand name. On the other hand, ‘Hey Siri’ is perceived by millions as a shortcut to frustration. What am I missing? Couldn’t they just call it ‘Apple Intelligence’ instead of ‘Siri AI’? Could you please answer Kyle?” Andrew Sharp Kyle seems to be much more of an Apple fanboy than you, Ben. Ben Thompson Maybe Siri has convinced people that it’s not worth using the name Apple. Maybe it would be better to use a different brand. In fact, associating Apple’s AI business with the whole company isn’t good for the Apple brand. Andrew Sharp As you’d know if you read Stratechery, I posted a new headshot. I’m finally going to change the profile picture that’s been on my page for 12 years. Everyone complained that I looked like a child and a marathon runner. I actually used to be a marathon runner. I should take a look at this photo. Ben Thompson Yeah, I took a new profile picture. Andrew Sharp It’s cool. Today is a really exciting day in Madison. That’s why you don’t look like a marathon runner anymore. Ben Thompson Speaking of my ethics policy, there are a few companies I’ve spoken with. When I first started, I had several sources of revenue in mind. I planned to do subscriptions, advertising, consulting, and lectures. I think there was a fifth source of revenue as well. I remember having 5 ideas for generating revenue, but I don’t really remember what the fifth one was. I did a few consulting projects, and the last one was with Google. I said it wouldn’t work because the conflict of interest was too severe. Although I disclosed that, I also thought, “Wow, it’s really surprising that I’m talking to high-ranking Google officials.” I thought the newsletter business would do well, and I didn’t want that kind of conflict to arise. So I vowed never to consult for a company I was covering again. Andrew Sharp Yeah. Ben Thompson That meeting was held in Napa Valley more than 10 years ago. There was a discussion about what to name Google’s voice assistant. I strongly insisted that it would be better to just call it “Google.” Google is a great brand, and people think of Google, don’t they? I didn’t really like names like Alexa or Siri. I don’t know how much of an impact my opinion had, but a lot of people exchanged opinions. Anyway, I was on Google’s side. They must have seen my opinion, too. I’ve never told this story before. They watched and… “Okay, Google.” Hmm. Andrew Sharp It’s terrible. I really hate it. The experience of saying “Okay, Google” feels like calling out the name of a multitrillion-dollar company. I think Siri or Alexa are much better. The funny thing is, they’re making the exact opposite argument from the one I just made. Ben Thompson It seems like a voice-recognition problem, right? Think about saying “Hey, Apple.” Team Apple? John Apple? Who was it again? It’s awkward. I think “Okay, Google” is a mistake. You didn’t take that into account. It’s more natural from the consumer’s perspective, and from Apple’s perspective, it would be better not to take on corporate risk. Andrew Sharp I really like the name Siri, but I feel the need to remake Siri. The name is good, but the product itself is so terrible. Do I need to remake it? I have to—because there’s no need to remake the name. The name itself is excellent. It’s easy for people from different language backgrounds to pronounce, and it’s very unique and distinctive. Ben Thompson It’s easy to read, too. It’s much better than Alexa. Alexa is a bit ambiguous, you know. I just like the name Siri itself. Andrew Sharp Yeah. That’s probably why they still stick with that name despite all the problems. Siri has been so terrible for the past 6 or 7 years that I don’t think I’ll ever use it again. But Apple might come to its senses. “Hey, Apple” probably isn’t a good idea for various reasons. Apple is still a great hardware company, and its AI software will likely catch up someday, too. ### Reading as an AI Bottleneck Ben Thompson “Ben and Andrew, we’re longtime listeners. I’ve been thinking about one of the biggest problems with using AI agents. It’s the sheer amount of reading material. I work in the IT industry in the United States, and while I’m fluent in English, it isn’t my native language. I’ve always struggled with reading comprehension, even in my native language. Before I encountered AI, reading comprehension wasn’t a major issue at work. My professional knowledge, math, statistics, and coding skills helped me in my work. “Then the situation changed as we started using AI agents. Now my entire day is filled with reading: planning, reasoning, summarizing, and more planning. Honestly, the agent produces results much faster than I can understand them, so I end up skimming or skipping most of them. That’s the part that bothers me. “I realized that the quality of the deliverables depends on how carefully I read and provide feedback during the planning stage. I believe my reading comprehension and reading speed are closely related, but now these two factors have become limiting to the depth of my work. For the first time in my career, I wish I could read faster and more efficiently. “As both of you work in reading and writing and use AI every day, has reading such a vast amount of material posed any difficulties? Is it a problem that agents churn out so much content? Or is there a better way? Is there a tool to overcome what I consider my own limitations? Ben, what do you think about this question?” Andrew Sharp Yeah, that’s a really interesting email. Ben Thompson What I want to say is that I read and write incredibly fast. I prefer to encounter everything in text, and I don’t watch many videos. If people share a video with me, I have to watch it 50 times just to get through it. The video I watched last week, too—you’ve been sending me videos for several years, but honestly, I’ve hardly watched them. I’m not ignoring them. I know there’s a video. I figure out what it’s about by looking at the comments. Andrew Sharp That’s a really good point. There’s so much to read in agentic coding, and I completely understand what you mean. The funny thing is, the time I actually have to work is usually late at night or on weekends, when I’m trying to relax. Ben Thompson Sometimes I want to have a drink, and it’s fine to keep asking questions through long text exchanges. It’s really important to read carefully and understand the prerequisites. I often need long-running tasks, and, if necessary, I test things with shorter runs, too. Then it comes back with each modification reflected one by one. For example, I’ll say, “I need to fix this line,” and it might respond, “There was an incorrect precondition, which is why that correction was necessary.” By then, the typo-correction stage has already passed. If something goes wrong, it’s important to figure out whether it’s a bug or an error in the reasoning. As problems come up, you move on to identifying the cause. In Claude Code, the more thoroughly you read, the better. Andrew Sharp I think the answer is—or, hopefully, will be—a generative user interface that fits your work. Ben Thompson Yes, exactly. It shows you in text what needs to happen. OpenAI seems to have demoed something in Codex or ChatGPT that generates interfaces in real time based on user behavior. You’re actually interacting with something. Voice technology has reached a certain level, and you can handle tasks verbally. Of course, it takes more time, because I have to read things aloud and the user has to understand the content. But what I found with Claude Code is really amazing. Andrew Sharp Did I talk about this last week? I was reading a book—or rather, I was talking to Ari Emanuel—and found out he’d published an autobiography. Of course, I always read a book before an interview. You have no idea how often interviewers are surprised that I’ve read the book by the person I’m interviewing. Why on earth do interviewers do that? It’s kind of pitiful. Imagine appearing on a podcast and putting a tremendous amount of effort into preparing for it. A book? Well, someone already helped write it. Ben Thompson Yeah, that’s right. Writing a book takes a lot of effort, followed by media tours and interviews, and then it turns out the other person hasn’t even read it. I guess that’s normal. Every time, they thank me and say, “You’re the first person who’s actually read the book.” They’ve said, “That’s really a shame.” I thought so. Andrew Sharp To defend the interviewers, just think about how busy people are. I skimmed through a 300-page book. If you were a talk-show host, would you have time to read a 300-page book and record interviews with all sorts of people all week long? Ben Thompson This is exactly why Andrew Sharp, the last person to defend the media, is speaking out. If you want to receive subscription fees, you have to do that work. You really have to work hard. You read books at a superhuman speed, too. Andrew Sharp I went to a Brewers game the night before. I drove to the stadium, then from there to O’Hare Airport to catch a flight. I really had to read that book, so I listened to the audiobook. It worked really well for this book. I listened to the audiobook while reading on the plane, too. I couldn’t believe it. As soon as I landed, I was completely immersed in the book. It felt like the flight had vanished in an instant—like I’d had the book administered intravenously. I thought I’d give it a try. I’d never done it before. With sound in my ears and my eyes fixed on the page, I couldn’t look at social media or do anything else. The rhythm got broken up, and it was really hectic. Ben Thompson You understand, right? Give it a try. It felt like I had dissociative amnesia. Andrew Sharp Is that right—dissociative amnesia? Ben Thompson Yes, that’s right. It’s true. It was a truly unbelievable, amazing experience. It seemed really crazy. It was one of the strangest physiological feelings. I was in a daze, like I’d come from another dimension. It was really strange. Anyway, give it a try. How about using screen reader software to read and listen at the same time? ### Podcast-Listening Speeds Andrew Sharp I’d like to try it. The last book I read was by Patrick Laden Keef. He wrote a book about London, and I finished it in 2 days a few weeks ago. It’s a really great book, but I read it by hand, the old-fashioned way. If I’d listened to it as an audiobook, I would have finished it in 6 hours. Maybe it feels a bit slow because I read so fast. I played the audiobook at 3x speed. Ben Thompson Ah, I have a question about that. Robert writes: “I was enjoying listening to Ben and Andrew’s recent conversation with Ari Emanuel, but I was surprised to hear Ari reply that he usually listens at 3 to 3.2x speed when Ben mentioned listening to audiobooks at 3.5x. Really? I tried listening to the latest Sharp Tech audiobooks at increasingly faster speeds, but I gave up after reaching 2x. My usual listening speed is around 1.3 to 1.5x. Do I have some kind of superpower, or has Ben been trained to process audio at increasingly faster speeds? Andrew, what do you think? At what speed do you usually listen to podcasts or audiobooks?” Andrew Sharp I listen at 1x. I don’t know what my problem is. I’m strictly 1x. Ben Thompson Oh, I see. I also hate the Smart Speed feature that Marco Arment seems to have developed for Overcast—the feature that compresses every blank space. Andrew Sharp Me too. Everything I listen to is for entertainment. That’s my style. I listen to podcasts solely for entertainment. Many people listen to podcasts like Sharp Tech for information, and they probably listen at 1.5x or 2x speed. I’m not criticizing them. It’s just a difference. What I want is exactly that silence. Ben Thompson The people at Race Island must have missed that part. But do you know why I care so much about sound quality? It’s because I know that the better the sound quality, the faster you can listen, and that’s important to a lot of people. In this case, I definitely didn’t listen at 3.5x. I was reading while listening. I was also preparing for an interview, so I might have listened at 2x speed in the car. I had to listen fast because I had to get through it. I think 3.5x is just right. If I’d only been listening, it would have been too overwhelming, but it was fine because I was reading at the same time. It felt like I was using two senses simultaneously. I can’t put into words how fascinating it is. I was probably able to listen at 3.5x because I was reading along; otherwise, I might not have remembered the content properly. Andrew Sharp Yes. What speed do you prefer to listen to Sharp Tech at? Ben Thompson I get inwardly annoyed when people listen to my podcast at 2x speed. I record podcasts all week long, and listening to them at 2x speed is really unpleasant. Andrew Sharp A lot of people listen at incredibly fast speeds. If I fall behind, I have no choice but to speed up. I listen to Greatest of All Talk from beginning to end; it’s good. Sometimes, if I fall behind, I reluctantly speed up. I do catch up, but I listen at 2x speed. Ben Thompson Oh my God. Wow, that really hurts my heart. Andrew Sharp Honestly, it really hurts my heart. My tooth hurts. Ben Thompson How are you doing? You’ve really been working hard. Andrew Sharp Yes, I’m listening to every single word. You might not know this, but I’ve been quite busy lately. Ben Thompson Yes, I understand. There are a lot of cameras to install in this new studio. ### Olive Oil Recs Andrew Sharp All right, let me ask you a few more questions. This is a follow-up to Nick’s question from last week. Are you planning to replace the HVAC system? We’re pouring everything into it, so keep going anyway. Nick asks, “Everyone, what’s the olive oil situation?” You mentioned the special olive oil order in last week’s episode. Do you have any olive oil recommendations for Nick? Ben Thompson This is something I got from my mom. Oh, sorry—I forgot to check this question, so I wasn’t prepared. Yes, that’s right. It’s from Arizona. Andrew Sharp What a surprise. Domestic? Great. I should buy American ones. Ben Thompson Everything’s a mess today. I need my phone to log in. What should I do? Should I reveal the olive oil review in next week’s episode? Andrew Sharp Next week. Nick, there will definitely be an olive oil review. But give me one with a rich flavor. I don’t really like the others. Buying olive oil is really hard. You can’t tell the quality, and it’s frustrating. I’d pay more for good olive oil, though. I really love olive oil, especially for things like grilling. Oil and salt are really important. Ben Thompson I’m going to figure out that number. I think I’ll be able to figure it out soon, but I have to be sure. Andrew Sharp Understood. Here’s another question. Malcolm writes, “Everyone, I really like this show, but just for your reference, please search for Queen Creek on Google.” Queen Creek—here it is. To be honest, Queen Creek Olive Mill olive oil is really disappointing. Ben Thompson Well, we used to sell it in 1.5-liter bags. They had a spout, so they were perfect. I could keep one in the cupboard and take it out whenever I needed it. Andrew Sharp Yes. Ben Thompson All I had to do was press the button. Now we only sell bottles. Andrew Sharp Yes. So naturally, I have to buy the biggest bottle. Ben Thompson I’ve never experienced the magic of olive oil packets, so it’s not a problem for me. Andrew Sharp Oh, that’s good. Ben Thompson I don’t know why they got rid of them. Andrew Sharp It was a real shame. Malcolm says, “Queen Creek? All right, I’ll look into it. Good olive oil is always welcome. I hope Nick likes it, too.” ### Follow Up on Sports Rights The show is really fun, but just so you know, Google acquired Sunday Ticket for $2 billion. That’s less than 1% of Google’s total CapEx in 2027. This is exactly what I mentioned when we talked about the possibility of AI taking over sports broadcasting rights in the future. All sports broadcasting rights are nothing compared with the amount these companies are investing in AI. Ben Thompson That’s good information. I couldn’t immediately recall that figure when I was recording last week. Andrew Sharp Wait a minute. What did you say? ### You Can See Everything This is the last question. Eli says, “By now, you must have seen that You Can See Everything is getting the kind of rave reviews that come around once in a generation, calling it a ‘must-see movie in theaters,’ right?” Ben Thompson Yes, I saw the review. Andrew Sharp I also saw the preview of this week’s Sharp Tech article about the movie. You mentioned that there were parts that could be spoilers, but since I obviously had no intention of watching it, I skipped over them. Ben Thompson It was really good. You write really well. Andrew Sharp Thank you. The review was really good, and he was really passionate. Ben Thompson Yes. Andrew Sharp I’m thinking of going to see it, too. Ben Thompson You said you weren’t going to see it, right? Andrew Sharp I guess I should apologize to Eli. Ben Thompson That was good. That’s exactly the point. In the first paragraph, it seems like you’re saying, “You lied.” Andrew Sharp Yes, I completely lied on the podcast last week. I told Eli that I wasn’t a Nathan Fielder fan and that I didn’t want to see Elizabeth Holmes anymore, among other things. It was a rainy Saturday in Washington, D.C. For 48 hours, people had been saying, “Oh my God, this movie is seriously the best!” They kept talking about it. To be honest, I went to the theater expecting the movie to be bad and the exact opposite of popular opinion, but it was really fun. Wait a minute. What on earth is this question? I thought the word of mouth was spreading to some extent, but when I actually sat in the theater, I realized it was completely deserved. Ben Thompson Well, maybe that’s true. Andrew Sharp To be honest, I’m past my prime in many ways, but I sat in the theater to watch it. My recommendation is to see it in a theater. To minimize spoilers, don’t wait until it’s streaming. It’s best enjoyed in a packed theater. There are 2 reasons to watch a movie in a theater. One is the spectacular visuals, the magnificent screen, and the sound. The second is the experience of watching a movie with an audience. I usually go for the visuals, sound, and big-screen IMAX experience. It’s been a really long time since I was in a theater where people showed their emotions. Everyone was surprised and laughing together, and having that shared experience made it even more special. It was completely different from the Nathan Fielder work I’d seen before. He approached it much more sincerely, and I think he seemed genuinely annoyed with Elizabeth Holmes. That made for 3 really enjoyable hours. I never checked my phone. He’s looking at me right now with that distinctive Elizabeth Holmes look in his eyes. I just noticed. I highly recommend this work, which I completely dismissed a week ago. You won this round, Eli. Take a look at the article. It’s a good article. Ben Thompson The writing is sharp. Andrew Sharp Yes, I’ll put it in the show notes. There’s a spoiler warning in the middle, but you can skip it like I did. Do you like spoilers? Ben Thompson No. Andrew Sharp All right. That’s your responsibility. Ben Thompson Don’t go on the internet. Andrew Sharp No. Everyone’s always online, you know. Honestly, I think You Can See Everything is quite impressive. There are important spoilers, but people talking about the movie showed great restraint about mentioning them publicly on Twitter. I used the word “censored” a lot. It seems like people who love movies have a kind of sense of community and want to preserve the audience’s pleasure of discovery. But you’re against that sense of community, aren’t you? Ben Thompson A sense of community is basically telling you to go to the movie theater and watch a movie. It means you should go see it right now. Andrew Sharp No, I think that’s fun. While you were talking, I wondered, “Do I really think that?” I just said it as a joke. Well, the problem is that I had to record everything in Taiwan, especially sports matches. So I had to train myself not to go online. I was always in contact with someone like Devin, but he only accidentally spoiled something once or twice. Every time that happened, I’d say, “You’re really annoying. The chances of you getting fired are the same as talking about a boxing match.” That’s what I said. I understood Coleman’s downfall very well. Actually, there was also a part where I had to learn not to open Twitter. Ben Thompson I tried to follow the rules and turn off related group notifications, but sometimes I failed. But here’s my problem: I’m in Taiwan, so how could I possibly dare to inconvenience others? I felt like I was inconveniencing them. Andrew Sharp You could have thought about it the other way around: “Don’t tell me the ending of The Sopranos, please. I don’t want to know.” Ben Thompson That’s what I said. Andrew Sharp “Hey, calm down. It’s already been 20 years.” Right? Even so, people still act as if it were a recent event. There’s definitely a statute of limitations. I’ll probably reveal everything within the next few weeks, but there’s a chance to see it this weekend. Ben Thompson No, the statute of limitations starts from the moment I saw it. Andrew Sharp Yes. All right, then it could be 3 years. Ben Thompson That’s right. Then we’ll be able to talk for a while. Andrew Sharp No, I read it all the way to the end, including the spoilers. Ben Thompson Are you okay? Andrew Sharp Yes. Well then, Ben, let’s continue next week. Should we try an AI show-and-tell? Ben Thompson No, it’s fine. Andrew Sharp All right, let’s wrap things up. You said you had to go to the airport. Ben Thompson There isn’t much time left. Andrew Sharp Right, this is the last segment. There is a subscriber-only mail bag scheduled for Sunday. You can listen to it on the audio feed, not on YouTube. Subscribe if you would like. You can watch it on YouTube next Friday. A completely new era has begun. I am glad to be working together. It was really nice talking with you today, and I look forward to meeting you again next week. We’ll talk again soon. See you later.