Welcome to the Neo Show, the podcast at the edge of AI and the future of the internet. Brought to you by Neo, the first safe AI native browser built to work with you, not against you. Here we uncover untold stories, explore bold ideas, and share insights from the leaders shaping tomorrow. Today, we're stepping into a new story that's just beginning, the AI browser war. To help us unpack what this new browser war really means, we're joined by two longtime friends and active voices on the front lines of AI. Guru Chahal, author of the AI browser war, and Howie Xu, founder of Neo Browser, the AI native browser that's redefining how users navigate, discover, and create on the web. Together, Howie and Guru will share insights on AI, bold ideas for the future of browsing, and the vision driving the next era of the internet. All right, gentlemen. Welcome to the show. It's my pleasure to host today's conversation about the next browser war with Guru Chahal, the partner at Lightseed, as well as Howie Xu, chief AI and innovation officer at Gen Digital. So I know you guys have been knowing each other for two decades, although I guess you guys like each other a lot but sometimes depending on where you ask the question depends on the question, right? And I know you guys do not agree with each other sometimes for some topics like today the AI browser topic. So we're going to spend the next hour trying to cover as many questions as we could to dive into this topic to offer different perspectives. So let's get started. First question, help us to define what is an AI browser. Guru, why don't you start first?
First of all, thanks for having us. I think this is going to be a lot of fun. Howie and I never have not interesting conversation. So I'm really looking forward to this. Just to give you some background, I'm a partner here at Lightseed. We're in our beautiful courtyard. We're about 305 billion assets under management. We're a global firm and we've been in existence for over 25 years. Largely focused in our early years on enterprise investing. So that's browsers all the way down to silicon systems, all the picks and shovels businesses, large language models. Now large language models. And so very strong practice there. But taking a step back, we invest across sectors. So consumer, fintech, etc. And across stages, so early as well as late. So that's a context. I specifically focus on enterprise investing typically at the very early stages in seed or series A's. And my focus area tend to be anything that you would define as infrastructure below the application. Now that could be browsers. It could be all the way down to foundation models. It could be enablement layers in cyber security and observability which I'm sure are part of the reasons why we discussed this all the way going down to silicon. And now to your question around why is this even an interesting topic. I think it goes back to a very simple premise. Over the last 20 years, actually more than that, more than 25 years, systematically the system of engagement for a human or a user with computing has moved away from the operating system into the browser. So everything that was relevant at the operating system layer is now also relevant at the browser layer. We used to use operating systems primarily as a mechanism for security, observability, gathering data, running applications. All of that now happens inside the browser. And so my going-in thesis becomes the primary mechanism for AI to interact with tools that were designed for humans is also going to be the browser. That then becomes an interesting choke point where you collect data, where you do automation, where you secure AI to systems interactions and so on. So that's the framing that we use. We're already investors in this space. As I was sharing with Howie earlier, a few years ago, we saw some incredible teams building enterprise browsers. So a version of the browser that say Lightseed would feel comfortable running because our IT team and our security teams can then control what can and cannot be done inside the browser. So we invested in a company called Talon which was then acquired by Palo Alto Networks and we were the lead investors there and we saw how quickly that entire market developed into a very large enterprise browser market today and I think the thing we are going to debate today is whether AI becomes another reason for a net new class of browsers to emerge and become a large market. So I'm excited.
Yeah. I think when the Talon acquisition happened, AI wasn't the reason.
That's right. With cyber security.
That there are other reasons that happens, but that's an interesting thing still is we haven't seen acquisition of browser technology for a long time. Suddenly browser is interesting technology. Now fast forward another year or two, browser is even more important. You wrote up this article. I was asking you just a few minutes ago, why did you? Because you and I know each other for so long, we discussed so many things, but we never discussed a browser in last 20 years. And then when I saw this article from Guru, I was like, what is interesting in browser? Now you explained it right. Your initial interest in browser was this enterprise browser. It makes a lot of sense. But now you are interested in AI browser. Why are you interested in AI browser?
So it comes from sort of two key realizations and a foundational belief. Our foundational belief here at Lightseed is that foundational models and AI in general represent a brand new class of capabilities that bring cognitive labor, make cognitive labor accessible to technology. So for the first time ever since we've been in technology, machines can process language that is semistructured, understand language, work with it almost like a human would. So then the question becomes, okay, so what's the limit on this? One is how smart could models get? We believe we're barely scratching the surface and models will continue to get better. We're one of the largest investors in companies like Anthropic as an example. So that's our core foundational belief. Now on top of that, then the question becomes, what holds it back? If these models get really intentional, what holds you back? And essentially two things hold you back: a model's ability to absorb data and learn and do a better job in an enterprise setting, so observe and learn, and two, to actually take action, do something. So two access and there is one piece of technology that is the universal window to both observe what's happening and also take action, and that becomes a browser. Because almost I suspect, Howie, before you came to this meeting or over the last many years, 95% of what you do on a laptop or a computer you're doing through the browser, which means if I was the browser, I would know exactly what you're doing and all the software you're interacting with, and I would then presumably be able to interact with the software in that same way. Now, it's not 100%. We have desktop applications too, but if you're going to start somewhere, you would start at the browser. And I think that's why browsers were always very strategic real estate, which is why Google did the entire Chrome project. Think about it. The only reason they did Chrome was because they wanted to own search, but it was such a strategic real estate that in the age of AI, it is several orders of magnitude more important. And so that's why this renewed interest in browser that it addresses those two key things. It enables you to gather data in a passive continuous way and it helps you to take action continuously as both a co-pilot but also as an autonomous agent that can do work on your behalf.
The second question actually I was talking to Howie the other day, the news that Perplexity makes a long shot $34.5 billion US dollars offer for Chrome. What's your reaction when firstly reading the news?
So we're not investors in Perplexity, so we don't have any more data than the two of you do, but I will say one thing: there is zero downside to doing something, to saying something like that. Zero downside, right. So if it doesn't happen, you got great buzz. And at the end of the day, Perplexity is a B2C business. So anything that gets you more attention is all you need.
Attention is all you need. I love it. So attention is all you need. So what's the downside? There is zero downside. And on the absolute sort of small probability upside, maybe there is a situation where Google is either forced or wants to divest Chrome and in which case why not make a play for it. And so I see that as a very clever, very smart thing that Perplexity put out there. Look, I'm right now a chief AI officer at a public company. If not, I would have bid for that too. Why not? Guru may be supporting me to bid for that. Who knows? So I totally agree with Guru in that there's zero downside and if nothing else the worst case is tremendous amount of the attention. I think Google is going through a very interesting time, right? On the one hand, search business is under attack. For me personally, I don't use Google search nearly as much as I did before. I can only see that's going to be more and more true for the mass population in the next 5, 10 years. So that is a big threat to Google. But at the same time, they are also an AI provider. They also have a lot of smart engineers. So it's a very interesting time. But since today we are focusing on the browser world. Obviously, Chrome is what, 70% market share plus, it's the gorilla in this market. I personally see that browser war is real. 10 years from now the default browser for 70% of people is not going to be Chrome. Not even close. The reason is very simple. For the reason that Guru just mentioned today, if you think about it, Google's revenue roughly $400 billion a year. And then search is a big part of that. A big part of that is actually sourced from Chrome. So anything they do with Chrome it has tremendous impact to the revenue immediately. There are many different reports. The consensus is roughly speaking $80 billion of that $400 billion is directly from Chrome. So if I change the Chrome user interface, I'm changing $80 billion, right? How many companies with $80 billion revenue in the entire world? Think about it, right? So this is like a big deal. So I think they are going through this innovator's dilemma. It's not like they don't know what AI native browser should look like. They don't know the thesis that Guru was talking about with AI. I should be able to help the user to do browsing or to access the digital universe much easier. But they cannot possibly do too much change. So this is from first principle point of view that's a pretty obvious when I talk to people internal. It's also the same thing. They literally told me that my hands are tied. I cannot do a lot. I know what to do. My hands are tied. In a way, this is a very interesting that we are going through a period that number one guy is gone. That's my assumption for the next 10 years. So then who's the next? Perplexity obviously has a comet. There's a deer. You wrote up these two browsers in your article which I disagreed, you should have put my browser ahead of these two. All kidding aside, I think all of us at the very beginning call me the dear Norton Neil. This is but let me just give a very brief introduction. I actually joined Gen Digital about a year ago as a chief AI and innovation officer and among many other things I do. I started this AI browser project a year ago with pretty much I don't want to repeat what you said, everything you said is what we saw at Gen Digital. The browser needs AI component big time, not just hey there's a button AI summarize this page, that's not a that's an AI assist, right? I think the world needs AI native browser. You have to start from scratch. Rethink about right. In the past it's like a human. Okay, I want to go to CNN, Fox News, I click a link. If browser give me that page fast, I'm going to use this browser. That's pretty much why Chrome even went over the Microsoft IE. At some point, the JavaScript run much faster on Chrome. That's why Chrome disrupted IE. But these days, I think you still need that. But the way I interact with the digital universe shouldn't be like that. I know a link. The browser should know about me. The browser should bring the information to me even before I click the link. The browser should summarize or maybe even negotiate certain things or do whatever the task I wanted to do, right? It's not just agentic. The browser should be ahead of you rather than browser reacting to you. And it's very personalized. So there's so much you can do with that. So a year ago, we said let's actually rethink about the browser. And then we started this project and then along the way obviously Perplexity, Arc, right, these guys are probably thinking about the same line. And then the way I think of the browser today is very much like search 1997, you know. I don't even think the future of Google in this place is necessarily born or even there or maybe in garage, but I think the idea is there. Larry Page already start thinking about this right 97, 98 when he started at Google. This is where we are as far as what's the business model, as far as what the product looks like exactly. I think it will take some time for us to learn and figure out but there's no question that we would have a totally different browser. The browser shouldn't be I click a link, give me the content, that's nothing, right? The browser should be my personal assistant that gives me 10x productivity, helping me to do a lot of things 10x faster, right? How to do this? So that's kind of how we think about it. Neo was introduced in May this year and we believe that is our sort of the execution in terms of bringing AI to the browser, the safety, privacy. We can talk more about it. I think consumers are going to love it and they're going to have totally different experience.
Howie, you said the number one guy will be gone like Google probably won't be the leader in AI browser. That's why Howie said you agree.
I think the landscape is wide open for the first time in 15 years. Both of the major, call them strategic pieces of real estate that Google owns. One is search and the other one is browser. There's two most strategic pieces of real estate that they own. I think both are under threat. I think the opportunity exists and it's up to us, to folks like Howie and others, to think through how do you not just do something evolutionary slightly better but revolutionary, right? You have to rethink the system of engagement. If your browser is only slightly faster, that was great for Chrome in the war with IE. It's not enough now, right? What is enough now is yet to be invented. It's a complete rethink of how that interaction of a human user with the worldwide web happens and what's the opportunity to rethink that portal through which we interact with the web. So, I'm excited to see the innovation coming out in this. I'm really excited. I think for the first time, we're going to see something that is magical as that opportunity exists. Now I think voice will be part of that. Better security, more automation, easier discoverability. I think all of these things are up for grabs.
By the way, I don't know you had a chance to download and use it yet.
I'm looking forward to it. I just got your email. Thank you for that.
Okay, so new browser.ai, people who watch this show will get activation code. I love to get your feedback. Maybe that's episode number two at some point.
That's excellent. You guys mentioned some AI browser products already like Perplexities, Comet, Deo, right? The rumor says OpenAI is going to launch its AI browser.
I too will bet that over the next two to three years, we will see tremendous innovation and more browsers in this space. We will see startups. We will see large AI labs. We will see certainly perhaps even companies like Google reinventing either Chrome or a net new browser in different ways. We're going through this Darwinian sort of explosion of a complete change to how we interact with the world. And I think to some extent even Claude on your desktop or ChatGPT on your desktop is competing with the browser. To your point, I couldn't agree more. You said I'm using Google less and less, man. My first stop is not Google for anything now. When I'm looking for information, I'm in a meeting, somebody says quantum computing, I was like I don't know anything about quantum computing. I don't go to Google and say please tell me about quantum computing. I literally go to Claude and say give me a quick introduction to quantum computing. 5 seconds later I've got the perfect sort of write up. I go through it and now I'm at least conversant in it. I think there's some fundamental changes happening. Browser is going to be a key part of that. I will not at all be surprised if OpenAI either develops their own or makes a play for Chrome. It will happen. I think we'll see tremendous innovation in this space.
While we have not heard the rumors that Anthropic is developing a browser,
Don't tell me no comment. That I cannot comment on. We, as you both know, we are huge fans of Anthropic for a very simple reason. It's the best team that is pushing the frontiers of intelligence but in a way that is safe, secure, trustworthy, interpretable and these are things that matter to folks like Howie and I because of our enterprise roots. And so we think there's just a tremendous future in applying intelligence and cognitive intelligence especially in enterprise settings. For sure, Anthropic will continue to experiment with new ways in which you can connect their models and their intelligence to both the data that an enterprise needs and also the actions that these models need to take to automate. Could that be a browser? Sure. But that's up to Mike Krieger who's the CFO, CPO and his team.
Do you think the AI browser war will be the battleground for giants only or startups also have an opportunity because we can see the LLM game is totally like big players game already?
100% startups have it's a level playing field. It's a level playing field and the reason for that is actually interestingly the fact that Chromium which is the underlying engine inside Chrome is open source. Maybe 15 years ago I wouldn't have been so bold to say that a startup will just come out and write a browser from scratch. The reality is the internet is such a diverse place that supporting all the different types of things that you need to support to create a browser is a pretty tall task. But I'll give you the proof point for what makes me very bullish on new players emerging, not just the larger companies. Howie and I have a bit of a cyber security background as well. And about five or six years ago, a few founders decided there is an opportunity to build a brand new browser for enterprises that is secure. And you would have a blink reaction say that kind people like Chrome or Safari or others, there's no way that's a real market. And the reality is we were lead investors in a company called Talon that got picked up extremely quickly by Palo Alto Networks and is now an extraordinarily large business inside Palo Alto Networks which is a large cyber security company. There's another company called Island which is also doing really well. And so there is an opportunity for startups. Both of these are startups. They built the stuff off Chromium. You can pick up Chromium as a startup engine as your startup building block and then rethink everything else about the user interface and the system of engagement. Optimize for security, optimize for automation, optimize for AI in different ways and build something new. So I think the field is wide open.
Very high. I would say it's only for small players. However, I agree with Guru that Google may have a different project outside of Chrome. That's to me that's a small player within a giant that's possible. I just cannot see the giants that this sort of the number one players current number one application is going to shift too much for the reason I just mentioned. I just don't see that possibility. I do see a possibility another interesting project surfaced but usually you know how it goes in the big company, it's tough. That's the typical. So I would say that's I might be biased but I would say it's actually for people who doesn't have market share, it's actually time for them or me.
Great, and how will AI browsers disrupt the current way of advertisers because search engines like browsers are the main traffic entrance for a lot like SEO's rankings, display ads. So, how will this new AI browser thing disrupt the money-making machine for Google and Meta?
I think you're asking the right question, but it's a narrow question. I would encourage you to take a step back and ask a bigger question. What is search in this brave new world that we are going in? So, historically, all of us used search as a discovery mechanism for us as a human. You want to travel somewhere, you say Hawaii, great hotels, and then you would search. And you have to ask yourself, five years from now or some long arc of time, five years from now, 10 years from, are you really doing that? Because are you really going to this bar and typing in Hawaii great hotels to see 10 blue links and one by one clicking through those and figuring out who else is reviewing this? And is that really going to be the system of engagement? I can tell you, my bet is zero chance. Zero chance five or 10 years from now you're going to this small bar whether from Google or Bing or some other search engine. I think that entire world gets completely disrupted, completely changed because what you will do is to a trusted agent or a browser that you trust and say I'm thinking of going to Hawaii, what do you think? Here's some options. The search will happen but it's getting pushed one layer down and is getting done by AI. And so I call this talk to your travel agent which is the browser about hey here's my plan, you figure out. Maybe you need to do search, maybe you need to talk to Claude or OpenAI, whatever, right? You know that's your job. My job is to talk to my travel agent.
That's right. Now think about the repercussions of that. The entire search industry today, entire search industry is based on a very simple assumption that there's a somewhat impatient human who doesn't have perfect querying abilities sitting there and wants an answer right away. And that's why, ever ask, think why do they only show 10 search links? That's because if you showed 40, I would be overwhelmed. If you showed only three, I wouldn't quite trust you. So, you know, somehow with enough experimentation, you decided 10 seems like the right number. And so, the entire industry is focused on this act of me going to this one bar, you know, typing in an imperfect search query and then going through results one by one. That AI agents, that is not how. For instance, one of our companies, xAI, is building a search engine specifically for AI agents because AI agents the way they search, the things they search for, and the kind of queries they can ingest back is vastly different from human today. Does this great hotels in Hawaii, 10 links show up, I click on each one of those, here's what I do. By the way, I open each tab, now I've got 11 tabs in my browser, then I go one by one each tab, I don't like any of these, then I go next page, page and a click through and oh my god it takes hours. What a frustrating thing. You know what an AI does? Doesn't care for 10 tabs. It's not going to open 10 tabs and then go browse those hotels. It makes one query says give me 100 hotels and give me all the metadata associated with and give me all the reviews all in one shot. One shot comes back, jam into the context window. Ask four people based on what you know about Guru. What are hotels you think I might like on these days? And by the way, don't even suggest something that's not available on those dates. And it shows me three things. I was like you know what I feel like going to this one right now. So the entire notion of how search happens changes and that is the bigger threat to search. The threat to search is not just the browser moving from Chrome to Neo. The bigger threat to search is the fact that it's not a human searching anymore. I just don't believe that human initiated search queries will be the dominant search 10 years from now. It is just not the case. It is AI that is doing that search and discovery. And so we are investing in teams that are making that world a reality. And so the browser becomes more of an interaction mechanism through which you're driving automation. You're having conversations. You're doing things that matter to you as a system of engagement for entertainment at work. Search as a function gets delegated to AI that does it fetches the right piece of information for you in that moment. I very much agree. Before you talk about monetization business model, we first need to talk about what the future looks like. You just laid out the future Chrome to Neo browser. That's just one part of the future. But also how the search is being done, which layer in the tech stack. I totally agree with you. But just one additional color to share about this business model. I would say we don't know what the business model is in the sense that if you think about search, why Google even, you know, why we even have a Google? That's because Google, when Larry Page actually I heard this on a podcast, there was a fascinating story. It was 1997 before Google started. Larry Page went to this company called Excite, it was one of the double digit number of search companies, and Excite was doing pretty well. And then they tested my search and then Google search and then their team felt strongly Google search is far better, far better. So the CEO, you know, in the last meeting, CEO went to the room and said hey let me figure out actually like why the technology or whatever we wanted to do. The moment he saw that Google search was far better and then people will the first link is so relevant, he basically said get out of the room. Why is that? Because of the business model. Because the Excite business model is about banner ads, so the longer people stay on that page, the better. So if the first blue link is actually the relevant one, my banner ads revenue is going to be shrinking, not increasing. So to me, like for us to thinking about okay ads revenue this and we're going through another major shift. So I would say whoever thinking about ads revenue the way it's being done today which is enormous is wrong. Now the only guy who couldn't say that is Google, right? He cannot say, Google cannot say, I cannot, they have to, right? They have to report to the Wall Street every quarter, right? Hundred billion dollar, most of that is ads. So I would say Google is screwed for that reason. Now of course Google has a Gemini model, has a lot of other things, right? They may spin up a new project. So I think the future is unclear from that point of view. But I want to say to answer your question, one is what I totally agree with what Guru says, think about what the future looks like. I think it's a different future. And secondly, what is the business model for that new future rather than what's the business model in the current way of thinking of ads?
There's a way to think about this. When you look at a particular market, are the products serving the business model or is the business model serving the product? In the early days of development of a market, you come up with a great product and then you attach a business model to it to serve the product because you want to build more product. You want more people to use it. This is the early days of Google. And then you get to a point at some point after tremendous success, you're stuck in that business model and the product serves the business model. This is when you go from Google's search engine tremendously successful is now stuck with this business model. So instead of three or four banners on the right side, you start showing those results at the top of the search results. And then slowly you start making them look more and more like an actual search result.
How many times you do a search query nowadays on Google and you're like, is this a sponsored result or a real result? I have to pay attention to that little italics at the bottom: sponsored. I was like, nope, scrolling right past. But I doubt everyone is that careful because they make it look like a search, and now you have a situation where the product is serving the business model. That's where the opportunity is, and that's why venture capital exists. Those founders that we are funding, they don't care for the business model. They want to build the absolute best product. We've both been founders. We didn't start our companies going, man, what's a business model? I believe no, we saw an opening in the market to create an amazing product, and then we bolted on a business model to that to serve that product in the right way. And I think that's the opportunity. The market is a natural way of the world. I don't blame Google or anyone else for that. It's their success that lands them in that place. And it is that the fact that you're stuck to your business model, and the business and the product is merely serving the business model now and not trying to be the best product it can be. That is the opportunity for founders, and we're pretty excited about that.
Yeah, that's great timing. As you said, I often click the first or second one in the Google page and then turn out to be something totally different.
Sometimes they joke about this on a competitor company will show up in because of the rankings. There are times on my mobile I can't even use Google anymore. If I use it, I have to go through one screen and then a second screen. Now I'm past the sponsored results to get to the actual search query. Why would I use that? But I can just fire up Claude and say, here's my query, give me the answer. This that's because they have a product serving the business model. That's the reason. That's exactly that's an easy explanation.
