Do you think being managed in an automated or quantified way will dehumanize or depersonalize your workforce?
There are lots of ways that bad organizations will use these technologies to do bad things. Don't be a bad organization. Celebrate your employees. Make them rich. If every promotion decision is made by some totally unaccountable AI system, that seems wrong. If we can get the incentives for the next business model of the internet to be less around how do we just create rage and emotion, and maybe I'm too much of an optimist, but I think the way that you stop a lot of the horrible things we see online is by solving the business model that is really broken.
Hello and welcome to Decoder. I'm Nilay Patel, editor-in-chief of The Verge, and Decoder is my show about big ideas and other problems. This episode is part of a two-part series on the future of business. Today I'm talking with Matthew Prince, the CEO of Cloudflare.
Cloudflare is one of the most important infrastructure companies in the world. It protects all kinds of apps and services from bad actors on the internet, basically making it possible to operate a business online.
Matthew last joined us on the show about two and a half years ago at what we thought then was a wild pivot point for the internet. But now, because of AI, it turns out things are even wilder. And Matthew and Cloudflare are right at the center of it.
Cloudflare found in June that bots now make up more than half of the internet traffic, a number that just keeps going up as more and more AI companies scrape more and more of the web. And now as more and more people send AI agents out to do things for them on the web, Cloudflare sits between websites and all those AI tools and allows website owners some level of control.
They can block all those tools, allow them, or, as you'll hear Matthew describe, potentially only allow those that pay money for access. So Matthew and I talked about how to control all those bots, what kind of mess they're making with the web, and what kinds of information might be more valuable in the future as some of these payment schemes come into focus.
You'll hear me ask pretty directly if some of the outcomes he's describing are actually good. Matthew is a thoughtful guy, and his answer is something I'm still thinking about well after we had this conversation.
Matthew is also at the center of another important AI debate. Earlier this year, Cloudflare laid off more than a thousand people, 20% of the company. And Matthew wrote an op-ed about that decision which ran in the Wall Street Journal under the headline, 'How I Choose Which Cloudflare Employees to Replace with AI.' That is pure Decoder bait: AI, big controversial decisions, and org charts all in one.
So obviously, we talked about that decision in detail and what it might mean for how companies are structured in the future. One last thing before we get started: you can subscribe to Decoder on YouTube, where we put out new episodes every Monday and Thursday. Okay, Matthew Prince, CEO of Cloudflare. Here we go.
Matthew Prince, you're the co-founder and CEO of Cloudflare. Welcome back to Decoder.
I am really excited to talk to you again. It's been about two years since you were on the show. I was just looking back over that episode and I said something to you like it's a momentous time for the internet, and I was not even close. It's now an even more momentous time for the internet.
You are at the forefront of rebooting how companies work with AI. That is the most Decoder bait of all time. I want to talk about bots and the internet and publishers and Google and all the things that you're in the middle of. But let's start at the very beginning.
Cloudflare is a complicated, important company. The last time you were on the show, you summed it up. You said Cloudflare is a service that makes the internet faster and protects it from bad guys. Is that still how you would describe what Cloudflare does?
That's usually when I'm trying to answer a question at a cocktail party and I don't want to talk to the person anymore. What I'd say if I actually was sort of interested in talking to the person more is probably that Cloudflare is trying to rebuild the internet the way it should have been built from the beginning if we knew how important it was going to be.
And so we run a giant network. We're in over 350 cities worldwide, literally thousands of data centers in all those places we have equipment running. And then we do a handful of things. If you're trying to put an application or content online, we make sure that it's safe. If you're a person or an employee who's online, we make sure that wherever you go online is safe.
We help give people the ability to write applications that can scale to an entire internet audience and run on the infrastructure that we have. That's the fastest growing part of our business. And I think the thing that we've recently started to think about is the business model of the internet is changing dramatically, and we're sort of trying to help work on shaping what that future business model of the internet looks like and how can we make it as healthy as possible.
Can I connect the dots between the business model of the internet, how the internet should have worked, and Cloudflare is trying to build the internet as it should have been? That is different than Cloudflare protects from bad guys. I will note that's what you said to me last time, which now makes me feel like you didn't want to talk to me at the cocktail party, but that's fine.
That's a shift. That's just a notable shift, right? That the business model of the internet has dramatically changed because of AI, because of bot traffic, because of AI scrapers, the whole thing. Describe what you think the business model of the internet is right now and what it should be.
So for the last at least 30 years, the business model of the internet has been advertising. It's not the entire business model of the internet, but it's really the thing that has driven all of the growth of the web, all of the growth of what has built what we all enjoy today, and is really a miracle.
And the company that is responsible for that more than any other is Google, who for the last 28 years has really defined that. And we all think of it for the search business that they have, but they really built out all of the ecosystem around advertising online. You know, they bought DoubleClick. They built things like Google Analytics that let you actually see who was coming to your property.
And they really are the hero of what I'd call the first generation of the internet and the first generation of the web. What's changing though very quickly is who is actually using the web or what is using the web.
You know, last November I was at the Web Summit, the big European tech event, and I was asked, you know, when do you think that nonhuman traffic agents and all of those things are going to pass human traffic online? And we have a lot of data because we see a huge percentage of the internet. We pulled all of that data and looked at it and said that, you know, the second half of 2027, automated traffic will become larger than human traffic, which felt like a big deal that we could see that first time in the internet's history.
I was asked again at South by Southwest in March of this year, 2026, and we pulled the data again and it had moved up where it was going to then be the first half of 2027. And we're like, 'Wow, this is growing.' You know, I mean, this AI thing is a big deal and people are using it like crazy and it's driving a huge amount of traffic.
And so I was stunned when just a few months later in May, teams came to me and said, 'You won't believe it, but automated traffic is now past human traffic online.' And that's just expanding like crazy. And if you extrapolate that out, with the giant caveat that I've gone wrong so far in every prediction that I've made on this, but five years from now, we think that automated traffic will be a thousand times human traffic online.
Not because human traffic is going to decline. We think it'll stay kind of around the same. But because we're just seeing such an explosion in all of this, the rest of the traffic. And the challenge to that is if you have, first of all, a thousand times more traffic, someone's got to pay for the infrastructure to power that. That's going to require bandwidth. That's going to require servers. That's going to require a lot of things in order to make that happen.
And the traditional model of how to pay for that, which was advertising, doesn't work for bots. Bots don't click on ads. They don't respond to pretty swirls of paint and what we traditionally think of as a brand. And so we've got to come up with something else that's going to power that incredible, insatiable demand that's going to be put on the internet going forward.
And that's what I'm spending a lot of my time trying to think about, what that's going to look like.
When you describe that as a business model, that sort of implies that, you know, there's going to be customers and revenue and profits. And I don't know if any of that's true.
Huh? I think there's certainly a lot of revenue.
Well, there's maybe for the Cloudflares and the Googles of the world, but for...
the Anthropics of the world, ten billion dollars of revenue in a single month. So there is enormous demand for these AI services.
And if you're an AI company, what you really need are three things. You need great talent and researchers, and right now that's scarce. And so right now we have a scarcity of people who really understand how to build these systems. But that's going to change. Every single university in the world is standing back up their AI department. We're training people like crazy. You know, labor markets are pretty efficient. So we're going to have more and more people coming into the space.
The second thing that you need is you need chips. You need the ability to actually, the silicon to run these things. And today, you know, Nvidia is the best in the world at that, but you've got a whole bunch of others, whether that's AMD or Qualcomm or all the hyperscalers that are building their own chips in order to power these things.
And so while we have a massive shortage in the availability of silicon and the ability to actually power it up and turn it on, look, that's going to shift and change as well. And so the third thing that you've always needed, you actually need the data to feed into all of these different models.
And that's been the one thing that I think is going to go the other direction, which is that historically we've just made the internet completely open and given bots access to all of the stuff that's being created, your episodes, everything else that's out there. I think that's starting to change, and what we're seeing is a shift where more and more of the people who are creating content, really creating information, are saying, you know, maybe we'll give that away for free to humans. But if a bot is coming for it, then bots have to pay for it because they don't have that traditional give to get.
You can't put an ad in front of them and have that be something that allows me to help pay for the content creation that's there. And so what we're seeing is actually going back to some of the original protocols of the internet. The 403 protocol, which was written in the very first version of Netscape, was actually payment required, and you actually have to pay for the content that you're receiving.
And that's something, excuse me, I've said 403. It's actually 402. That's something that again we're working with other leading companies like Coinbase and Stripe in order to say how do we make sure that we can allow people who are creating content, people who are doing things online, anyone who's putting a website up, to say that in exchange for that thousands and thousands and thousands of times more traffic that's going to come to you.
You're not going to maybe get kind of the advertising revenue that comes from it, but maybe you can get a fraction of a penny every time somebody actually accesses that information. And where does that fraction of a penny come from? It comes from the fee that people are going to be paying for their AI agents and other systems that are out there. Really similar to how a Spotify or an Apple Music works today.
I like that we're less than ten minutes in and we're already at the 1996 dream of micropayments on the web. We're going to stick with that for one more turn here. When I said business model, what I was really pushing at was the idea of incentives, right?
So maybe there is some business model for information. You're going to publish some new information and bots will come and find it, and yep, the 402 protocol will come back to life, and we're going to do, I don't know, crypto micropayments using Stripe powered by Cloudflare. That's a version of the future that many people have talked about for a long time.
The incentives to stand all that up on the web is the thing that I'm worried about when I say there is a business model and customers and revenue. If I stand up a website and I think most of my customers are going to be bots and not people, I might not do that. I might just start a TikTok channel instead and then monetize my TikTok audience in whatever way I might want to monetize a TikTok audience.
That seems like a really big inflection point right now at this second.
You mentioned Google, and you know I've asked Sundar about this many times. The incentives to put new information on the web just seem to be in permanent decline. It just doesn't seem like a good idea anymore.
Where on the flip side, the web as an application platform is at absolute apex. Like every new app that comes out is a web app, or if it's a desktop app, it's just Electron. Like there's something happening with the web as an application platform that is incredible, and something happening to the web as an information platform that is devastating.
And you're trying to connect those dots, right? You're trying to say we can change the incentives over here. What's a version of the future, maybe it's microtransactions, maybe it's not, where the incentives to make the web an information platform are as good as YouTube?
You've sort of illustrated what is kind of a tough-to-reconcile dichotomy that's happening right now. So if you look at things like the publicly accessible data on Wikipedia contributions, it's down significantly because people are like, why, what's the incentive to put information on Wikipedia? Something that again, people were doing for a lot of different reasons.
And I think the problem there is like back in the day, if you were contributing things to Wikipedia, you knew people were at least reading Wikipedia. Now the interface through which people consume that information isn't going to Wikipedia itself. It's just reading the answer through whatever answer engine you're using, whether that's OpenAI ChatGPT or Anthropic Claude or Grok on X or whatever it is.
And that means that the people who are, you know, the editors of Wikipedia are saying maybe it doesn't make as much sense for me to do that. The flip side of that is, you know, the web as a whole actually had been declining since about 2012.
So the web grew like crazy in the late 90s and through the 2000s, and then starting around 2012 you really saw it plateauing and actually decreasing up until about 2025 where something flipped. And starting in about October of 2025, driven a lot because of the various vibe coding platforms, the ability that we made it easy for anyone to create a website, that more and more people were creating those applications.
And as you said, even your desktop application, your mobile application, increasingly it's just a wrapper around what is fundamentally a web application. And the growth of the web itself, with really high quality stuff and a lot more people contributing to it, is faster today than it has been at any time since the early 2000s.
And so that's the tension between those various things. I think what's unique about Cloudflare is that because we sit in front of so much of the web, more than 20% of the web, we have the ability to overcome some of the incentives problems that you have.
And so we can very quickly turn something on and say, 'Okay, for a fraction of a penny, you have to pay a fraction of a penny in order to get access to this information.' And that can kickstart what I think is the beginning of what we need.
And again, the problem is if you don't have something like that, we face a massive tragedy of the commons problem. So let's say today I ask, I don't know, whatever my favorite AI agent is, you know, where should I go to lunch? I mean, if I was doing research, I might go look at a couple of different menus, you know, as an individual.
My agent today goes and scans every single menu in the local area in order to figure out what's going on. And again, only one of those places is going to actually get my lunch dollars. And so if that just expands infinitely, if there's no cost to doing that, at some point my agent's just going to look at literally every piece of resource, every resource that's available everywhere on the internet and then come back and say, you know, you should go to Wendy's.
That's an enormous waste. And so we've got to have something which is actually saying that, you know, there's a cost every time you load a web page. There's bandwidth, there's servers, there's things that are behind that, and someone has to pay for that. And if it's not going to be advertising and it's not going to be directly commerce, then there has to be something that actually puts some constraints there.
And I think where we're in a good place to say is like, yeah, it can be a tiny amount of money, a thousandth of a penny or something like that. But that's enough that we can actually start to say, okay, that will help pay for the infrastructure.
And then if you have incredibly valuable content, you know, if you're a news publisher or you're an academic, then maybe there's a premium on top of that that you charge and say, 'Hey, I'm not going to give you this content unless you pay even more for it, but I believe that it's valuable and we can create a market for it.' In order for that to happen, I think again, you've got to have a player like us that's in the market that can kickstart that.
But I think once you kickstart it, we've seen from the side of the buyers, the big AI companies, that they're all willing to do this. We've seen that from the side of the sellers, the big content creators, that they're all really excited about this. And so what's really been lacking is actually the technology that links those things together. And again, that's what we're spending a lot of time actually building.
It feels like the theoretical underpinning of this conversation is the very notion of scarcity itself. I'm an old copyright lawyer, and copyright law for years and years and years had just a built-in mechanism to be important, which was that one copy of a CD was one copy of a CD, and if you wanted another one, it was pretty hard to make another copy of a CD.
Even when it got easy, you still needed another physical CD-R, and that imposed some cost on how many copies you could make, and it was hard to distribute. Then all of that went away with the internet.
Right, we moved everything to digital files, and the burden of making another copy fell to zero.
And I think a bunch of consumers expected everything would be free. There's that famous quote, 'Information wants to be free.' There's a second half of that quote everyone forgets, which is that information also wants to be expensive because it's hard to generate.
And the internet just turned that upside down, right? The gating mechanism of physical media, which provided some scarcity and thus some economic value that you could measure, went away, and we decided information should be zero and maybe supported by advertising. It was actually attention that became valuable because that was scarce in its way.
You're talking about imposing scarcity, right, with your technology.
You know, we always talk about markets needing supply and demand. That's not exactly right. What you need is you need demand for sure, and you want infinite demand ideally, or as much demand as you can get. Infinite would probably be bad because then it would be hard to discover price, but you want demand.
And then you want actually constrained supply. There's no market for air where either of us are sitting right now because there's plenty of air. But if we go scuba diving, then all of a sudden there's a market for air because air is constrained underwater, and so you have to buy it in order to be able to do it.
Music, I think, is the example that I look to when I think about what could this look like in the future. You know, I flew up to Stockholm to meet with Daniel Ek, who started Spotify, and I mean, it was just a fascinating conversation because if you think about the history of music, you know, sure, once upon a time, the majority of music sales was from CDs or albums or whatever it was.
And then along came the internet, and along with it Napster and Grokster and Kazaa and all of the things that essentially commodified music and made it available for free for everyone. And even if you were an incredibly law-abiding human, the majority of people were actually just downloading music because they wanted access to music.
And if you go back 23 years ago, the music industry in total was valued at about eight billion dollars, which is a lot of money, but it's not a lot of money for the entire music industry. Like that's the Beatles and the Rolling Stones and everything else. But people were like, we can't make any money off of this.
And then almost exactly 23 years ago to right now, Steve Jobs steps on stage and announces iTunes and that it's going to be 99 cents a song, but they're going to include cover art and they're going to make sure it's high quality and all these things. But mostly it appealed to this emotion of you should be paying for music.
Now, that's not the business model that won, but it was a flag in the ground that said that this information is actually worth paying for and it's really valuable. And you know, it was iTunes that then eventually begat the Spotify of the world.
And the incredible thing is, you know, just last year, Spotify sent something like twelve billion dollars back into the music creator ecosystem. And we can debate whether the right people are getting it and whether it's fairly allocated.
This is my favorite thing to argue about because I think whatever happens to the music industry happens to everybody else five years later. So I spent a lot of time thinking about it, and the turn there, which I think is fascinating and is either good or bad, is that the amount paid for the music files themselves became very small.
Right? You can get a million streams on Spotify and you're not making any money, but the amount generated by touring and commercial sponsorships and sync licensing to advertising all skyrocketing.
That's just simply not true. Why is private equity buying all of the music catalogs for hundreds of millions of dollars? The answer is because actually making money off the streaming of the music is extremely lucrative. And again, Spotify alone is sending twelve billion dollars back to the music industry, back to the actual rights holders behind these various things.
And so there is way more money coming from Spotify into this than there is from touring or any of the other things there. Those are other ways to make money, but actually it's the streaming that is really driving all of the real growth.
Sure. But I just want to draw a distinction here. And we don't, we can argue, you're not here to argue with me about music, which is my favorite thing to do, so I apologize for just doing it, but private equity is going to make that money, not the musicians, right? They're paying some of the catalog holders for some of the things, but that money flooding in.
If the musicians, if the Beatles, you know, if the Rolling Stones or whoever used the latest was to have sold their music catalogs, had held on to the music catalogs, then the musicians would have made that. They're making the determination that, and by the way, when they sold the rights, they got the check.
Did you get the check? But the only comparison I'm making is, is it better for you to take the annuity of payments over the course of the next 50 years or to take the lump sum up front? That's the trade-off that they're making.
But there's more money going into music creation at this point in time than there ever has been in human history. And so technology is not inherently a destroyer of value of information. In fact, in this case, it has been a massive enabler of value in this and allowed people to find audiences and yes, sell more tickets to their concerts as well.
But I think that that's actually the model that we need to think about, which is how do we take what Spotify has done, which is to say we pull together the resources of a bunch of people that are paying for access to the entire catalog of music and then give that back to musicians based on some sort of algorithm that hopefully rewards where there's actually real value which is created.
If you had the same thing where a portion of what is being paid for the various AI companies, well, yeah, to pay for the researchers that built the AI systems and you had to pay for the chips, but also to pay for the content, which is actually the real knowledge that is training these things. I think that's exactly the type of model that you need in order to actually unlock what could be a real golden age of information creation.
Yeah. The comparison I'm making is not whether a bunch of aging rock stars are going to sell their catalogs and cash out because they're old, right? That's fine. They can do that.
It's more that the shift you're describing into gating access, into wide open access on Spotify to every song ever made, and then we're going to move some pennies around and some people get rich and we'll create some winners and losers, fundamentally changed the entire business model of music.
So Spotify, again, this was fascinating. The conversation with Dan was fascinating. He said, 'Okay, listen. If you go on to Spotify and you search for, I don't know, Taylor Swift, Shake It Off, like they return a result and they're pretty sure that they have given you what you were looking for.'
On the other hand, if you go to Spotify and you search for, I want a song to a disco beat about how much fun it is to dance with my cat, not a lot of songs like that that are out there. And so they know that whatever they return is a pretty bad result.
But the interesting thing is what happens next, which they then take those searches for things that they don't have good results to and they publish that back to music creators. And I think that there's something that's pretty amazing about that, which is they're saying, 'Here's an emotion that someone is searching for, which we don't have a good answer for, which we're then going to go and publish back to music creators.'
And there's a guy who, if I remember the story correctly, is in Denmark, who makes, and again, this is one of those moments where everyone's going to be like, I'm in the wrong profession, forty million euros a year writing songs for unfulfilled Spotify queries.
And he's not alone. He's the most successful, but there's a whole bunch of people that are making literally millions of dollars or millions of euros a year doing this thing where they're writing songs for what people are searching for that are out there.
Now, extrapolate that to the next level, which is to say, for the first time in human history, we've built a mathematical model of human knowledge. That's what the LLMs are. And we know where they know things, but we also know where they're missing things.
I picture like a giant block of Swiss cheese, and there's a lot of cheese, but there's a lot of holes in the cheese. And the really interesting thing is when you talk to the leaders at the big AI companies and you say, 'What do you want to pay for?' They don't want yet another story about what's happening at 1500 Pennsylvania Avenue, which is what the current media environment is feeding us like crazy.
What they want is to fill in the holes in the cheese. They want new knowledge that no one ever knew about before. And so the example that this is actually working is, you know, my wife and I own a small local newspaper in Park City, Utah, which is our hometown.
I think we will make more money off AI licensing deals this year than we do off digital advertising. And the reason why is because local media is exactly the sort of thing that is much more valuable in the media world that we're going into, but was just completely decimated in the media world that we were coming out of, where what mattered was volume and scale and dividing things.
Whereas local media is all about, let's tell you about the cool new restaurant that just opened down the street. If you're an AI company and you want to be able to be the best travel planner that's out there, you want to have artificial general intelligence, like you need to know what the hot new restaurant is in Park City, Utah. And if you don't have access to the Park Record, our newspaper, you don't know that.
And so what I think is interesting is we're not going to protect all media in the same way that, you know, the move to Spotify, there are a whole bunch of losers in the musician space, but there are going to be new winners like that person in Denmark who's creating things off unfulfilled Spotify queries.
And I tend to think that the winners in what this new space might be might actually be the kind of things that people really want to come back to media: more local news, more unique things, more Reddits of the world, right? More of what the internet used to be, you know, when I was first on it in the '90s.
Like, I think that that's actually what most internet users are craving. And I think that if we get the incentives right, we actually have a way of maybe incentivizing more of that unique original content as opposed to what we have today, which is a media ecosystem that is largely just rage-baiting people into clicking on things so that they can serve them an ad.
One of the things you would need to build in order to make that work is a way to stop the AI crawlers, to stop the model companies from showing up. Just today there's yet another lawsuit, right? The music companies are going to sue Anthropic. The White House came out in support of OpenAI and its case against the New York Times today, saying that training should be fair use.
I think I need to disclose that in some series of corporate mergers, The Verge's parent company is now suing Google in some way. I have literally nothing to do with it. It's just all that. It's all the swirl, right? And that is a legal swirl.
We're going to use the law to say this is illegal and we'll punish you if you do the bad thing. That's just up for grabs. Those are 50/50. Maybe existential.
I mean, maybe not. I mean, I think that the law right now, at least in the US, the US is different than everywhere else. And so you got this patchwork around it. But like the best case on this is probably the Anthropic case where the judge basically said that training is fair use against all the books.
But, and by the way, you shouldn't have stolen the books. That was bad. But if you hadn't stolen the books, if you actually bought the books, then it would be okay. And that was a valuable enough result for Anthropic that they settled the rest of the case for two billion dollars, which is a lot of money even for Anthropic.
And so I...
Right. So when you're building technology, you're keeping that in the back of your mind, right? The market is coming to some sort of understanding of what's valuable and what's not, and you need to stop them from showing up. Different regulations are going to be passed in different places around the world.
So like I, and again as a recovering intellectual property attorney, like I very quickly go to like, oh, let's just use intellectual property, but like that's such a kludge versus the much easier thing which is let's just use technology and, you know, identifying...
I remember sitting with a bunch of media execs and they're like, oh, how are we going to stop these nerds in Palo Alto from scraping our stuff? And I was like, you know, I go to war every day with like North Korean and Iranian hackers and the Chinese. Like they're really good at it. And they hide.
Whereas like the nerds in Palo Alto have a Delaware-based C-corp corporation, like it's pretty easy to identify them versus the others. And it's really difficult for them at scale to hide from us.
And in fact what we're seeing is actually much more of them being willing to say, listen, we will specifically identify when we are coming to a site that it is us, that you can rely on us, and we'll tell you exactly what we're doing so that you can have the right to control how that information is being taken.
I think that that was an interesting question like two years ago. But you know, even the Googles of the world who've been at times challenging through this, because Google, you know, it's sort of like a Marvel film, like the hero of yesterday becomes the villain of tomorrow.
Like the challenge has been that they're like, we struck all these deals to get access to all the internet and now we can use it for whatever we want. And we kind of were like, eh, in the past you were sending people traffic, now you're training on things and sending them no traffic. That's a different give to get.
And what I've been really actually impressed with the Google team is that they are much more willing to engage here. They understand the value of the ecosystem. There are people at Google who really do believe in making sure that there is a healthy sustainable ecosystem going forward.
And I think already some of the things that they've committed to around transparency of their crawler and some of the things that I expect that they will do over the next little bit, I think that that's actually a good sign and it's going to make it so that, you know, if even Google is doing it and is willing to say, I'll announce what I'm doing and in many cases I'll even be willing to pay for content, like I think that actually just makes it even easier to convince all of the other AI companies to do the same.
Do you think you need to turn the screws all the way and actually block the Google crawlers to get them to pay?
As of September 15th, we're going to set the defaults across all of our free customers for it to be that Google is going to be blocked for AI training. But if they won't differentiate between AI training and search engine training, we're just going to block them across the board.
Even if you're a site owner, you're like, I don't want that to be for me. We make it easy for you to turn it off. It's just about what we set the defaults to. But I'm really encouraged that Google is, that the sort of good forces at Google are realizing that this has to be a healthy ecosystem and that they have to play by somewhat the same rules for this new market which is AI that everyone else is playing for.
And that they can't leverage the monopoly that they had in search yesterday to create a monopoly in AI tomorrow.
I've talked to Sundar about this many times. I don't think he loves the fact that I am the person who keeps calling it Google Zero, but so be it. Sundar is very thoughtful. He's very kind. Every time I talk to him, I get the sense that what he wants to say is, 'Well, you didn't do anything about it.' Right?
All you publishers are complaining. You got super addicted to my fire hose of traffic and you have no leverage. You built no audience of your own. You didn't do anything. Look at all of these other platforms that I have to compete with. TikTok showed up and YouTube had to compete with them. ChatGPT showed up and the search team had to compete with them, and you did nothing.
This feels like something, right? We're going to block the Google search traffic. We're going to block the crawler. I think the CEO of People is talking about literally blocking Google.
Steve at Reddit has really become more aggressive in Google doesn't work if it can't search these things, and it's actually more existential for them. The very nature of how Google's search ranking works is it builds a tree, right? That's what PageRank was. It sort of says, okay, here's a super reputable thing and then let's see how it's connected to everything else that's online.
The problem is if you know, with Cloudflare again, 20% plus of the internet, if that just disappears, that's a giant hole in the middle of the tree, and so it doesn't just break it for this, it breaks it for everything.
And I think that's what we sort of realized that on behalf of and in conjunction with a lot of our customers, we could say, listen, this isn't fair anymore. You are creating costs, you are taking content, you are getting value from that content either in terms of the subscriptions that you're selling to your AI tools or to the ads that you're running against that, and that's just not a fair give to get anymore. And so the deal has to change.
And so I'm really proud of the fact that, you know, we've played a role in helping, you know, the publishing industry go from what was, you know, two years ago when I had dinner with Neil from People. He's like, 'Woe is me. What are we ever going to do?' And I'm like, 'I think we can fix this.'
And now, like last time I saw them, we gave each other, they all high-fived and said, I think we're making progress. And the deals that large publishers are doing are significantly better. And now I think the question is how do we bring that to the rest of the internet?
Because if we don't, we have this massive tragedy of the commons problem where it's just going to be take, take, impose cost, impose cost, impose costs. And the incentives for actually creating things, for contributing to the Wikipedias of the world, for putting up a new website, for writing about what the new local restaurant is, for creating local news and local media, for being an academic, like if there's not some way that you can do those things and still eat, like still make enough to eat, then people aren't going to do it, and that harms us all.
And again, I've been very critical of Google over the years. I will say that their tune appears to be changing over the last few months, and I believe that at their core they really do understand that this is an ecosystem and that they play an important role in that ecosystem and that they need to give back to that ecosystem and play by rules that allow the ecosystem to flourish.
You said Google's going to make some changes soon. What changes would those be?
You know, I think the thing that they've already committed to is just a lot more transparency on what their crawler is doing. So what we had pushed them to do is split their crawler apart and say, you know, we're going to crawl for AI separate from crawling for the web.
And I think that they, for a lot of technical reasons, pushed back and said, you know, that actually is incredibly inefficient. You don't want to, we now have to crawl twice. That's going to put twice as much load on everything that's out there.
What if instead we just said when our crawler comes to a page, we'll announce what it's doing and then give you the ability that if you don't like it doing something to say, no, no, that's not allowed, but this is, and put that together.
They have signaled that largely in response to what was a ruling out of the United Kingdom that they were going to put those procedures in place to allow publishers to make that choice, and that they wouldn't just do it in the United Kingdom, but they'd actually do it on a broader basis.
And I think we come out of this on the other side with a stronger web and frankly with even a better Google, which would be great.
Hey everybody, this edition of Decoder Sessions features Andrew Melisac, The Verge's general manager, in conversation with Raj Chararma, global managing partner for growth and innovation at EY Global. I hope you enjoy this conversation.
Let's talk about EY.AI. What is EY.AI bringing to my enterprise?
So EY.AI, at a high level, Andrew, is a culmination of many years of work where we have built our infrastructure, our intelligence layer, our compliant ecosystems, all bundled into a reimagination engine which has got our technology platforms, our deep industry expertise, our deep domain knowledge, and our training and our personnel that we bring to the clients to fundamentally reimagine that process that is out there.
What are some of the mistakes that you see when you sit down with CEOs, CTOs, heads of innovation? You're like, 'Okay, we can get in here. We see this all the time. We can help you.'
The one thing that we always ask our clients to watch out for is to get too narrow in the discussion of the AI that is out there. AI is only as good as the hands that shape it. If you're going to invest into that type of a technology, you need to start with a business mindset of the value that you want to create from an enterprise perspective rather than taking a technology-first approach.
Looking at that business, looking at reimagining that business and what it could be in future, and then looking at how AI can help you get there. That's the fundamental thing.
I could argue with you about the music industry all day and all night. I think you know that. But it is true that changing access and copyright law and all that stuff around the music industry changed the business, right? The incentives to put on shows and do residencies and all that changed because of the distribution changing. That I think we can generally grant.
You're describing an information market where the incentives will shift again, right? Where it might be more economically lucrative to make information for the bots than for people, and that might shape the very nature of the information. You run a local paper, maybe your people are publishing restaurant reviews that are best ingested by an LLM.
Yeah. Or instead of reviewing a hotel, review every hotel room. You know, for every word that appears in a story in the New York Times, that reporter has written down probably a hundred words somewhere else. That's all that other metadata which traditionally has been constrained by, you know, how many column inches you had in the physical paper or how much attention a human would actually spend on that.
Imagine if you could say to the LLM like, 'Hey, listen. We're going to sell...' and again, there's all kinds of things around protecting sources and you have to, there's stuff you have to get right, but if you get it right, there's an enormous rich source of a catalog of additional information.
For every picture you see in a magazine or a newspaper, there are probably fifty or sixty that were taken of that same thing. And like that's all valuable to these AI systems that are out there. So I think there's a lot of ways that we can imagine how there's just a bunch of content that's literally being thrown on the floor today that actually can be incredibly valuable.
This is my universe. I feel confident about this one. You know, I was in a packaging meeting today for one of our big stories and we had a pretty wholesome debate about the lead...
Image in a story we're going to run in a few weeks. We disagreed and we eventually picked one, or we picked a direction, and that was an editorial choice that was designed to elicit some reaction in humans. We could publish all the rest of the photos. They're all really, really good, and we decided one would be the winner and the rest wouldn't. But if I publish all the photos and I give them to an LLM, it will change the thing that we made, right? Because its distribution will necessarily change and its intended audience will change. Like maybe the biggest Decoder trope of all is that your distribution inevitably changes the thing you make, and at the end of the day maybe my future is just making YouTube face slings and AG1, and that is the future of all podcasting. There's just some force of distribution that changes the thing that you make. Is the outcome you're describing good, where we're just making an infinite flood of information, GEO-optimized for some human to consume, digested by a chatbot in the middle?
Well, so I think that, so first of all, is the current model good? You know, I mean, I've talked with lots of people at your parent corporation, and again, I think you guys do a good job. There's a lot of media that today is just how do we create content as inexpensively as possible.
And then A/B test headlines in order to either stimulate a dopamine or cortisol response to that. If only the media was that scientific, we would probably... I mean, I've sat with some of the folks from Huffington Post, some of the folks from BuzzFeed where they were like, yeah, that's the game and that's the game that we play. And again, I don't know that that's a game you play everywhere, but you can even see, you can track the New York Times, you can track the Wall Street Journal, you can track the FT and just watch how much more inflammatory and almost tabloidish the headlines have gotten over the last 20 years. And again, I think that those are still, every one of those is an amazing media organization, but in order to win in this space, it's been how do I provoke really a deep...
Well, what you're describing is they're playing to their distribution, which is largely social media, right? It's algorithmic, social media algorithms, and that is the distribution, and it's shaping the content. So I'm asking you about the new distribution that you're describing. But let's just frame that, you know, the sentence that I say that gets everyone at Google to yell at me is everything wrong with the world today is Google's fault. That is not fair to Google. Google has by and large been a great company. But Google begets Facebook, which begets TikTok, which has us in this attention economy hole where it's just like what we're trying to do is get as much attention as possible. And the best way to do that is to actually stimulate again a deep sort of mammalian response. That's the media landscape that we live in today. And I think it's deeply broken. And I think it's what's divided the world. I think it's what's led to the rise of sort of very destructive populism around the world, much less sort of real intellectual debate. So what could we move to? And again, I think there's a lot that can go wrong here, but what if you talk to Sam at OpenAI or Dario at Anthropic, or you talk to the teams at Google that are building the AI systems at DeepMind and others? What do they really want? They want new true knowledge. They want the thing that nobody knows about yet. They want the story about, you know, the interesting thing that no one else is covering. They want that thing which is actually advancing human knowledge forward. That's what I want to read too, right? I don't actually want to read yet another take of what happened in the Trump White House today. There's plenty of that, and they don't want it either. And the best evidence of this is actually how some of these distribution deals have been done. So the New York Times, amazing media organization, and Reddit, also an amazing media organization, have about the same amount of tokens, in that the New York Times has been publishing for a lot longer. Reddit is a lot higher volume. And so they do deals. Who gets more money for their tokens? The answer is Reddit by at least seven, by some measures 14, by some other.
And just to be clear for the audience, you're using tokens as a measure of amount of new content...
Of content. Yeah. Content that's in there. And again, it's not just new content, but it's the legacy content as well. And so the question is why? And again, this is deeply unfair to the New York Times, but if you don't have the New York Times, then you can just license the Wall Street Journal and ask AI to rewrite it as if it's a New York liberal, and you get the New York Times. Deeply unfair, except that all of these media publications, the major media publications, have made their business of telling the exact same story to their individual tribes. Whereas Reddit, like Reddit, if you don't have Reddit, there's no substitute for it. Reddit is this unique thing that's out there. And so I think a media of the future that looks more like truly unique kind of storytelling around again local communities, unique stories that no one else has told, real knowledge creation is what is valuable and is proven valuable by the market that exists today.
