Cloudflare CEO: The Man Deciding The Internet’s Next Business Model

Thanks for having me.

It's good. I'm in Park City, Utah. Fall in Park City is beautiful, so it's great.

Yeah, it definitely is a weird point in time. I feel incredibly lucky that I was born at a time where I got to experience the internet and kind of grew up on it. Back in gosh, 1993, when I was in college, I helped create what was one of the first online-only news publications. Wired gave us an award, and we were supposedly one of the first thousand websites that was publicly accessible that was out there. To see then today, where there are literally hundreds of millions of sites, and the internet has just exploded—even this conversation that we're having is being carried over the internet. Something like this that even just a few years ago would have cost tens, if not hundreds of thousands of dollars to produce, we're able to do very, very efficiently today, which is just an incredible miracle. I think what's been interesting, though, is that if you look back over the last 20 years of what the internet's been, it's really been driven by a business model that is really around advertising. Ads have been a huge and incredibly successful way to make content available online. If an ad's served to me, I've got a lot of disposable income and I buy stupid stuff from time to time, and so there's a really high CPM for having those—basically a price that you pay for those ads. But if there's a kid in Sri Lanka, even though they may not get the same kind of payments for that, they're still going to get something. And so ads have really been the only micropayment system that has worked at real scale, and it's carried the internet to what it is. I think the hero of the last really 27, 28 years of the internet has been Google, which has really built that ad ecosystem. Without the economic engine that they created—and we all think of search, but they also built Google Analytics, they built all of the DoubleClick infrastructure, everything that really powers that ad ecosystem—without that, we really wouldn't have the web in the form that it is, and we really wouldn't have the internet in the form that it is. So I think that that's been just an amazing transformation.

Last November, I was at the Web Summit in Lisbon, and someone asked me, "When do you think that automated traffic—agents and the various things that run around on the internet—when do you think that that will pass human traffic?" So I went back to my team, and we pulled all the data, and we looked at it. Based on everything that we saw, we thought it was going to be the second half of 2027. Fast forward to March of 2026, I was at South by Southwest, got the exact same question. We had pulled all the data again, and we're like, "Oh, wow. It's moved up, and now it looks like it's going to be in the first half of 2027." And so it was really wild when the team came to me—and this was in May—and said, "Hey, you won't believe this, but we've actually already passed automated traffic over human traffic." It's just wild that it has continued to grow like that. I think, with the big caveat that I've been wrong in every prediction so far, but if we see the current trends continue at the rates that they're going, we now think that automated traffic, agentic traffic, will be a thousand times as much as human traffic in five years—in just five years. That's just remarkably incredible that in the not-so-distant future, not because humans are going to decrease how they use the internet, but because bots are just going to increase so much that humans are really going to almost be a rounding error online. I think that's just wild to think about. The implications of that are pretty substantial, because if the internet was really built on ads previously, the problem is bots don't click on ads. And so the entire business model of the internet is about to change radically. What it changes to, I think, has not only amazing and profound implications on what the internet looks like, but it's going to have really deep implications on media generally, how society is organized, a lot of the sort of polarization that we are experiencing today. I think the most interesting question in the world is: what's the future internet business model going to look like? And that's where I'm spending a lot of my time.

Yeah, you know, I think there are parts of the internet that have gotten really centralized, and there are parts of the internet that are still remarkably decentralized. I'm actually really proud of the role that Cloudflare has played. At some point, there was an investor early on that said, "Who's your biggest competitor?" And I said, "Facebook." And they looked at me like I was crazy. But I think that's actually kind of true because when Cloudflare was first getting started, Facebook was gobbling up a huge amount of the internet where it was easier for you to be behind Facebook than having your own website. Part of the reason for that was having your own website was hard. You had to deal with security problems, you had to deal with performance, you had to deal with all this other stuff. And so people actually were kind of giving up on creating those things. And so I think—

The distribution Facebook page. I mean, in certain parts of the world, in Nigeria, the internet is Facebook, largely. And so there just isn't as much of that ecosystem that's set out there. And so I think, I would say Cloudflare is to Facebook as like Shopify is to Amazon, where we're taking some of the parts that are really difficult for people to deal with—security and other things—helping make that easy. And that actually has made it easier to create the internet. Part of what I think is really amazing about right now is that if you look from about 2012 through about 2024, 2025, early 2025, the amount that the web grew was minuscule. In fact, for a period of that time, it actually shrank. There were more websites being taken offline than there were being created. And what changed really kind of late 2025 was, largely because of AI, people all of a sudden who didn't ever think of themselves as developers were able to all of a sudden create websites and applications and put them online. And so we're actually seeing a growth of the internet that looks closer to what the internet growth looked like in the early 2000s now. And so I think it's actually been a pretty amazing time for all this to happen. Back to your question, though, in terms of societal impacts: if you think about it—and I get in trouble every time I say this, so why not just say it again—I think at some level, everything that's wrong with our world today is Google's fault. That's an overstatement. Google, I think, is actually an amazing company. They've done amazing things. But they did create this business model that was all around, "Just how do we capture people's attention and then monetize that attention?" And that begat other systems like TikTok and other things, which are really just trying to capture people's attention and really sell that. The best way to capture people's attention is either to generate dopamine or cortisol: make people kind of irrationally happy or irrationally angry. And so a lot of what media is designed for today is to push one of those two buttons in your head so that you can then sell an ad against that. So what I'm actually kind of optimistic about is, as we think about what the future business model of the internet is, instead of it being something around how do we get humans to sort of have a fight-or-flight response, how instead could we reward actual knowledge creation? I'm pretty optimistic about what that looks like and, again, what the positive impacts on society could be if we get that right.

Yeah, they're really quite distinct and all have different personalities. But the one thing that I think all of the major labs share is a real, just incredible fear of Google. If you think about how did OpenAI start? OpenAI started after a dinner conversation between Sam, Elon, and Larry Page. Larry basically was like, "Listen, if AI out-evolves humans, then humans deserve to be extinct." And Sam and Elon came to humans' defense and said, "You have kids, we have kids, come on." And supposedly—I wasn't at the dinner, but how it's been reported—Larry called them a speciesist, basically, "How dare you defend humans if the machines are better?" I think that there was really almost a religious aspect of the founding of OpenAI as like, "We've got to do something because otherwise Google's going to run away with this game." And Google had all of the resources to run away with the game. They had the best researchers through DeepMind and some of their other areas. They had the best silicon, where they had access not only to chips from people like Nvidia, but they had built their own TPUs and their own silicon, which were hyper, hyper-efficient. And then they have the most data, where even today, Google sees twice as much of the internet as OpenAI does, and that gives them an enormous advantage which is out there. I think there will be many, many books written on how, even with all those advantages, Google has kind of screwed it up so far. But I would certainly not count them out. But it's important to recognize that every other AI lab that exists, exists in some part because they started as almost a religious opposition to that attitude that was inside of Google. That's created some interesting both challenges and opportunities. We have an amazing relationship. 80% of the major AI companies use Cloudflare. We have great relationships, and they're customers, with both OpenAI and Anthropic, and xAI and Grok, the whole group, including a bunch of the Chinese labs as well. And so we talk to them all the time. One of the things, as we are thinking through what that next business model of the internet is, one of the important points is like, "Sure, listen, we get it, we've got to pay for the data that we're taking, but you've got to make sure that everyone else pays for it as well, and that includes Google." It can't be that the number one competitive threat that they all worry about, that they have almost a religious opposition to, that that company gets all of the data of the internet for free, but everybody else has to pay. A lot of the work that I've been doing at Cloudflare, working on, is just to say: how can we make sure that two things happen? One, that we make sure that Google plays by the same rules as everyone else. They shouldn't be able to leverage their monopoly of yesterday in order to get monopoly tomorrow. And then, secondly, how can we help folks like OpenAI, Anthropic, and others get back to the same level that Google does? Again, Google sees twice as much of the internet as OpenAI, four times more of the internet than Anthropic, many, many times more than someone like X or Meta. And so if we want to play for a world where there are as many successful AI companies as possible—and I don't want there to be one or five, I want there to be 500,000 amazing AI companies from all around the world—we have to make sure that everybody has a level playing field that they can play from. Again, I think that's a big piece of what we're trying to think about as we think about a healthy ecosystem here.

I think you can have open-weight models, and there's businesses that are built behind those, just like there are open-source companies that build great businesses that are there. But you still need to compensate creators. Take it out from this: let's just imagine in the future that agents are creating a thousand times as much traffic on the internet as exists today. Who's going to pay for that? There's a lot of things we can do just to make the internet more efficient. So we're working on taking old pieces of software which aren't as efficient, like WordPress and other things, and rewriting them to make them significantly more efficient. We do a lot just with the free version of our service and everything, just to make sure that people can have it. But at the end of the day, there's real bandwidth, there's real servers, there's real cost to serving that. If you don't put some cost in place, then you have this massive tragedy of the commons problem where, if I want to say, "Hey, where should I go to lunch?", if the cost of scouring the internet is effectively free, then bots are going to literally go and scour every page on the internet and then come back and say, "You should go to Wendy's." That's totally inefficient. There should be something that's there. And so we have to figure out some way that the people who are getting benefit from scanning the internet are the ones that are actually compensating for the infrastructure, as well as the work that goes into creating that original content that powers these bots. There's no way that we're going to be able to keep up with a thousand times the traffic unless we create some business model that helps create and pay for that infrastructure.

Yeah. Cloudflare at core is a network. So we run one of the world's largest networks, spans the globe over 350 cities, where within milliseconds of the vast majority of the world's population. In all those places, we'll have racks and racks and racks of servers, and we perform a number of functions. The things that people are probably the most familiar with that we do is that we help protect anything that you're putting online from various types of attack, whether that's cyber attacks or DDoS attacks or other attacks. We protect that. We also make sure that things are as fast as possible. So we make sure that if you've got someone who's visiting your site from Pakistan, and you've got someone else who's visiting it from Virginia, and someone else who's from Japan, regardless of where that is, we're going to deliver it in the fastest possible way. Over time, we've added additional functionality that helps protect internet users as they go out and use the network; they basically pass through us. Then more recently, really starting in 2017, we started working on: how can we actually make it so that anyone out there can develop software and then run it on our infrastructure in order to be as fast and efficient as possible? Today, that's one of the fastest-growing areas. If you use almost any of the vibe coding platforms, whether it's Lovable or Replit or Base44, or Codex from OpenAI or some of the tools from Anthropic, when those agents build software for you, the most preferred place typically for that software to run is actually on Cloudflare's network. That's been just incredibly rewarding. Today, a lot more than 20% of the internet sits behind Cloudflare. Almost half of the Fortune 500 is built on Cloudflare, and it's just been incredibly rewarding to see. In your world of crypto, it's one of the places where almost all of the major crypto companies are building on Cloudflare because they get to start with a new paradigm and a new blank sheet of paper. When developers come and are able to do that, what we find time and time again is that they're choosing to build on the Cloudflare developer platform. It's been just amazing to see what people in both the crypto space and now even more so in the AI space are building on top of us.

I wish I could say we were so clever. We started working on the developer platform back in 2017, so way before AI was sort of getting started—not really the real kind of rise of AI. AI was still kind of a backwater and a laughingstock; it wasn't really the place.

Yeah. I remember, again, in some VC pitch once a long time ago, we described Cloudflare as an AI company, and we got so laughed out of that room that we almost have an allergic reaction to saying it. And yet, at some level, that kind of was what we were. If you can get enough of the internet flowing through you and then you can run AI or machine learning algorithms against that, you can actually do a lot of things to predict security threats and enhance performance and do a bunch of things. But we were kind of nervous. So I think as we saw AI rising, we were happy selling picks and shovels to the people who were adopting it, but we were a little bit nervous about leaning in too much, both because it wasn't totally clear at first at least what the ROI was going to be for a business, and secondly, we're just really paranoid around—we didn't want to take a bunch of our internal data and ship it off to some company that we didn't know very well. And so I think we were sort of actually slow adopters of it. Really sometime kind of in the middle of 2025, it just became blindingly obvious that there was something here that was impactful beyond—we'd already seen some of that with our engineering teams, but across the entire company. I think the real turning point for us was probably November of 2025, where we really leaned in and said, "This is the point where you actually have to restructure even how a business is organized and run around making sure that we can take advantage of AI and use it for the things that it's really good at."

Yeah, I felt like late October, early November of last year, of 2025, was the point at which it was like—

Yeah. Less around rearchitecting the products, more around rearchitecting the organization. I think we had, through—the way all these things work, through somewhat dumb luck, we'd sort of built the right architecture. To give you the hyperscalers—AWS, Google Cloud, Microsoft Azure—they really were built for what was the mobile era. If you look at the evolution of where software is run: back when I was in college, if we wanted to stand up a web server, we literally had to call Gateway, the server manufacturer, to ship us a physical box. That was going to be our web server that we got there. It took months for this to arrive and then to get it all wired up and software installed. Then VMware comes along, and they have these VMs, these virtual machines that take one box and make it into many, so you could actually get more efficient. And then folks like Docker come along with containers, and really the whole hyperscale world and all of the mobile world is built on this idea of containers. The problem with containers is, if you imagine every single knowledge worker on earth has one agent that's running for them, which seems pretty conservative—I think most knowledge workers are going to have more than one agent—and you imagine those agents are all running in containers, the problem with containers is you have to import a whole operating system and tool chain, all this stuff. Just to power that, not even looking at GPUs, just looking at CPUs, you need 40 times the number of CPUs that are produced in the world in order to just run the agents for those knowledge workers. That's not going to work, so we've got to do something else in order to do that. What we did at Cloudflare is we said, "What's beyond containers? What's actually more efficient than containers?" And the answer is this technology called isolates, which most of your viewers will be familiar with. It's what powers the tabs in your browser basically, and the way that you can have lightweight systems where you can very quickly open a new web page, which is really an application. We took that same idea and applied it, and what that allows is just much, much faster, much more efficient deployment of code. That's exactly what agents need. So again, I think we happened to build the right technology for this moment in time. It's just amazing to see now how many of the agents that users are using are either running in isolates on Cloudflare's network, or as they're generating code, they're generating that code and running it in isolates. It's much, much more efficient, much, much less expensive, and just a lot faster.

First of all, we just started adopting it, and we were very realistic about: what is AI good at, and what is it not yet good at? I'm not in the camp of everyone's going to lose their job, there's no hope. In fact, we just see how much more productive our developer team is assisted by AI tools. If that's the case, there's so much for us to do that if a developer is now 10 times as productive, I'm going to hire as many developers as I possibly can. On the other side, in sales, a great salesperson, their favorite thing is to spend time with customers. We found that pre-AI, mostly salespeople were spending maybe 40% of their time with customers, but about 60% of the time was building presentations and filling in the Salesforce records and doing all of that kind of back-office work, which nobody really loves. And so we used tools to where now most of our sellers are spending 90% of their time with customers, and they spend much less time actually building those tools. That's driven just significant increases in productivity, which has been amazing. I think the thing that we realized was that there's a bunch of things about a business that you need to measure, and you need to measure them accurately. The problem with humans is that they have biases, and especially the problem with humans on a team is that they tend to have really shared biases across that, and it actually influences how accurately and how well humans can actually measure things. AI has biases too, but what's interesting, and I think actually undertalked about, is how those biases are uncorrelated with the rest of the organization. And so it's like a true outside fresh set of eyes to look at various problems.

What that means is, if in the past the Harvard Business School recommended number of direct reports that any manager has was supposed to be around six, we've found that actually you can have a better manager relationship with the people who are your direct reports. You can be fairer to them, you can give them better feedback, you can service when they need help more accurately if you use these tools. We found that you can actually take somebody who in the past would have had six direct reports and actually make that 12. What's powerful about that is that as you do that, the organization flattens. In fact, if you want to measure how hierarchical an organization is, the probably easiest thing to measure is: what's the average number of direct reports in that organization? The larger that number is, the flatter the organization is; the smaller that number is, the more hierarchical it is. We were around six, and we're sort of making our way towards 12 today. But as we've done that, it's actually flattened the org enormously, which meant we just didn't need as many middle managers because the managers were more efficient at doing that. Someone who was a middle manager at Cloudflare would be a great senior manager at some startup. What was amazing was—I mean, it sucked. It was incredibly emotional. There were really dear friends of mine that we let go. They're very talented people. What I'm proud of is we actually worked to make sure that as many of those people actually got placed in really great jobs. Some of them are starting companies; some of them have gone to work at other great companies. We really prioritized that, in addition to just giving what was incredibly great severance, continuing to vest stock, and doing a bunch of things that were pretty unusual. What has been surprising to me is that when I talk to my peers at other companies, especially other large public companies, they're all like, "Yeah, we've got to do that, too, but I don't want to stick my neck out because we saw your stock went down when you did it." I mean, it went right back up, but I got a bunch of death threats. There's a whole bunch of things which don't make these things fun to do as a leader. Honestly, that's what leadership is: when you realize you're going to have to make that change, what I know is that when we did that back in the beginning of this year, it was much easier for somebody to get a job than today. As more of these companies start to make these changes, it's going to get more difficult. And so I think, as a leader, once you realize you need to make these changes, every day you wait is actually a disservice to the employees that you're eventually going to lay off. I think that's just chicken leadership at the end of the day. The right thing that you should be doing is, once you make the decision, take the hit. Again, it sucked, and I got lots of arrows, but I'm proud of the fact that we've been able to place as many of those people—they're great people—in great other positions. I know they're going to create amazing new things going forward. Today, Cloudflare is running more efficiently and flatter and just better than we ever have before. That's because we've got great people who are building products, we've got great people who are selling products, and then we have fewer people that are actually doing the measuring, because the tools that we have are just significantly better to do those things.

I think everyone is. To date, we're one of the few companies that sort of did it from a position of strength. Most people are doing it because they felt like their business was threatened in some way or another. But everybody is looking out and they're seeing the same thing. I think there's some reasons why, because we started with a security background, we actually could figure out some ways to integrate these technologies safely into the work that we did in a way that I think some other companies are struggling with. But people are going to figure it out, and the harnesses that are getting built are really robust. We open-sourced the one that we—we call it Cloudflare OS, but we open-sourced it because it's just been so valuable to us. As that happens, there is going to be a significant shift across companies. Again, it doesn't feel good, but the kindest thing that you can do if you're the leader of any organization, if you know you're going to have to restructure how your business works, the kindest thing to do is to do it as soon as possible.

I mean, it's wild how many people I—

I mean, what we see internally is a lot of people who were managers are actually saying, "No, no, I want to go back to being an individual contributor." I think that what what it means to be a manager and what it means to be an individual contributor is going to get really kind of funny and blurred over time. And it's wild to see all these really senior people who are going to places like Anthropic and saying, "No, I want to go back to being a contributor." I think that's going to spread across this. I'm not sort of a doomer that we're all out of jobs. I think again, if you're a talented engineer, there's always going to be work to get done. You're going to use tools in order to do that more efficiently, but like I think that the world is bright for that. Over the course of 2024, we're hiring 1,111 interns, and it's just incredible what—

Yeah, we start at the beginning of the year. If you go over the course of the entire year, it'll be over a thousand interns.

Because they're amazing. They're all AI-native. Everybody else has stopped hiring interns, so we like to zag when everyone else is zigging. They came in and were just amazing. And what we did is usually we think our job is to train the interns on what it's like to have a real job and do all that stuff. We told them this year that, yes, that's still half, but the other half is you have to go train us. And so we've taken interns and embedded them in senior teams to show like, "Hey, have we tried this new tool or have we done this thing?" And it's worked incredibly well with knowledge transfer both directions. I spent a ton of time just having dinners in all the different cities we had interns in, and it's just wild how talented the group was. So I'm actually pretty bullish that we're going to have great people who are building things. I'm pretty bullish that selling isn't going to be something—there's going to be sort of agent-to-agent commerce and things like that, but if you're doing a $100 million software deal, that's still going to be humans.

Yeah. And so I think those two areas are really big. If you're getting a degree right now in accounting, I'd be a little bit more nervous. So I think there's a ton of work to do. Places like us are hiring like crazy, especially builders and sellers. And I think that is actually the most fun parts of a business that are out there today. So I'm optimistic. I'm not kind of in the "it's going to take everyone's jobs" camp like Dario and some of the people in the labs are. But I'm much more in the "it's going to refocus how we run businesses. It's going to put more and more importance on building things and selling things, and it's actually going to make us better at measuring our businesses as well."

Yeah. You know, I've loved being public. Again, to use a bad analogy, the rates of spousal homicide are significantly lower in jurisdictions that have no-fault divorce. Whereas if you make divorce hard, then one of the things that happens is spouses kill each other, which is obviously not good. The problem with private markets, and like private equity and venture capital and all those things, is that there's no no-fault divorce. It's really tough to get rid of your venture capital investors. It's really tough to get rid of your private equity investors. And by the way, it's really tough for them to get rid of the founders and CEOs of the companies that they run. It's painful, and as a result, you kind of find yourself in a weird situation where nobody tells the truth. Everyone's sort of hedging and couching. And again, I loved our VCs and I loved the folks, but public markets are so much better. If I say something stupid on this podcast, a bunch of our public market investors will call me and be like, "That was stupid. I sold your stock, and here's why it was stupid." And half the time I'm like, "Yeah, you're right. That was stupid. I'm sorry, and hope you'll keep following us." And the other half of the time I'll be like, "No, it wasn't stupid. Here's the strategy behind it, and let me explain it." And we can have really honest conversations. So I've really liked that it's just a much more truthful relationship. I think the other thing that everyone warned us about was that public markets are incredibly short-term oriented, they only care about your next quarter, all those things. That's just not been the experience we've had. We have these amazing investors. There's a Scottish investor called Baillie Gifford—average holding period is 16 years. That's the average. The average holding period for a VC fund is—I mean, VC funds are only 10 years, 12 at the absolute max. So you've got these public market investors who have incredibly long time horizons and are really focused on what the strategy is. If you listen to a Cloudflare earnings call, our CFO doesn't get very many questions; everyone is focused on what's the strategy, what's the future. So I think you can run businesses that are very long-term oriented in the public markets and have a lot of success as long as you continue to deliver innovation and growth. Again, I think that's something that we've done a good job at, and hopefully we'll be able to continue to do that.

I think our investors actually probably understand us sometimes better than our customers do. A lot of our customers still think of us as, "Oh, Cloudflare is like the security CDN that's out there." That's such a small part of the overall business of what we're doing, and we've really evolved. It's a very natural fit. The other thing that was interesting is, because we started out servicing the long tail, for a long time with investors it took them a while to realize that most of our revenue comes from really big enterprise customers. So I think those are probably the two areas: either customers still sort of see us for just doing one thing and they don't understand how all the pieces fit together, and then sometimes investors are like, "Oh, you're too SMB focused," and we're like, "Yeah, it's less than 10% of revenue today."