Small businesses face an extinction event: Cloudflare CEO

Cloudflare is firing on all cylinders. It's just been amazing to see that as we've built up what is one of the world's largest networks, that more and more companies are trusting us to provide their network security, to make sure that they're fast online. But I think the thing that's been kind of the real unlock for us and the reason why we're here in Cannes is the internet's business model is changing. Google defined the business model of the internet for the last 28 years, and the business model of the next 28 years is going to be different. And I am here talking to brands, talking to advertisers, talking to companies about what that future business model is going to look like, and I think Cloudflare is going to play a role in defining what it is.

You know, I think the internet's had platform shifts before. We went from a browser to social to mobile. AI is a platform shift. The way that consumers are consuming information is through that AI interface, and that's the way that they're consuming information today. It's the way that they're going to do commerce going forward, and the adoption rate has been just amazing. A third of the world's population is already using generative AI tools in just three and a half years. That, to give you some sense, that's twice the adoption rate that we saw with mobile, which was the last fastest-growing technology that's out there. And so as these things become the place where we consume information, what that means is if you're a platform, if you're Yahoo Finance or the New York Times or anyone else, fewer eyeballs are getting back to you. And so the old internet business model of showing advertising or selling subscriptions isn't going to work in this new world where information is consumed in the AI platforms themselves. Your agents don't click on ads. And so that's going to require us to find some other way to make sure that content creators like yourself and others continue to get compensated for what is critical content that they're creating.

You know, I don't know that I know exactly the answer, but I have a feeling it's a couple of things. So first, for the first time in history, two months ago, automated traffic, bot traffic, agent traffic online passed human traffic. And if it continues to accelerate at the rate that we're seeing, in five years it will be a thousand times more automated traffic online than there is human traffic online. In other words, humans will be a rounding error on the internet, effectively. What that means is there's going to be a whole bunch of additional infrastructure which is needed in order to build that up, in order to support it, and someone's going to have to pay for that. And so I think that there's going to be some version, which the internet consumed from the very beginning, of if an agent is accessing a page, there's going to be some kind of micropayment that goes back. But to give you some sense, Cloudflare, we process about half a billion internet requests per second, all day long. We think between one and ten percent of that will be appropriate for some sort of microtransaction, which means that we have to build a little financial system that can do tiny little transactions at day one, ten million transactions per second, to scale very quickly in a really reasonable time to a hundred million transactions per second. To give you a sense, Visa, the largest payments network in the world, does about 18,000 transactions per second. So there's a lot of really cool technology that we have to build in order to support this future. But I think micropayments, I think having a marketplace for content, making sure that you get to choose who gets access to that content, and then maybe an ads platform but directed at agents rather than being directed at humans. These are all things that we're here at Cannes talking about, that our team is working on and thinking about, and they're going to be necessary if we're going to have an internet in the future that is able to support the agentic traffic that we're seeing.

Yeah, so first of all, incredibly emotional day. A lot of amazing people who we parted ways with. And again, it's not fashionable right now to say this, but it really was driven by AI. And what we found was we are—if you go back to old Peter Drucker books, like—