The Upheaval Coming for the Internet Economy

Welcome back to This Week in Stratechery!

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On that note, here were a few of our favorites this week.

1. Will AI Kill the Web, or Save It? The original web that we know and love was the human web; that’s why advertising was the preferred business model, and Google was the big winner. So what happens when AI Agents are the preferred means to gather information? AI’s don’t care about ads, which means the web needs a new business model; I’ve been a long-time critic of micro-transactions, because they are anti-human, but they might be the solution to an AI-mediated future. Or, to put it another way, AI won’t just save AR and VR, it might save crypto as well. — Ben Thompson
2. Slam Dunks and Moonshots at Google. Google I/O in 2025 was classic Google in two respects. On one hand, it featured a spate of great demos and jaw-dropping displays of new features and capabilities that may or may not ever find a market among mainstream users. That’s become something of a Google I/O tradition. On the other hand, Google also introduced “AI Mode” for search, a collection of AI-powered features that will lean into Google’s advantages in audience and infrastructure and allow the company to gradually integrate more AI features into search. This, too, is classic behavior from a company that for all its excesses and eccentricities still understands its core business and how to move when it’s time to leverage and preserve search dominance. Wednesday’s Daily Update broke it all down, highlighting questions that still linger, as well as AI hardware and software possibilities in Mountain View and beyond. — Andrew Sharp
3. OpenAI Enters the Hardware Business. On Wednesday OpenAI interrupted Google’s big week when it announced plans to acquire Jony Ive’s hardware startup for $6.5 billion worth of stock, telling the world that the company will work with the Apple legend to develop a family of AI-powered devices and design “the coolest piece of technology that the world has ever seen.” If you’re looking to process that news, start with Ben’s analysis on Thursday, which comes with a bonus section on Apple’s dwindling options in AI (and a withering parenthetical on the “Tim Cook Doctrine”). Then head to Sharp Tech, where we had a great time talking through the logic of this move for OpenAI, challenges that lay ahead for Ive’s team, and a few emails from haters who are skeptical of this roadmap and/or despise the aesthetics of the OpenAI PR blitz. All of it was great fun, and whatever happens from here, the next few years just got a lot more interesting. — AS

Stratechery Articles and Updates

• An Interview with Nvidia CEO Jensen Huang About Chip Controls, AI Factories, and Enterprise Pragmatism — An interview with Nvidia CEO Jensen Huang about new problems, including chip controls and China, and new opportunities, including AI Factories and enterprise pragmatism.
• The Agentic Web and Original Sin — Microsoft is putting forth compelling proposals for the Open Agentic Web. However, the proposal needs digital payments, which will be key to creating a new content marketplace for AI.
• Google I/O, The Search Funnel, Product Possibilities — Google I/O was impressive and overwhelming, but the only product that impressed was Search.
• OpenAI Acquires io, OpenAI’s Strategic Positioning, Apple’s Worsening AI Problem — OpenAI is acquiring io, Jony Ive’s hardware company. Is the company actually focused on displacing Apple? Apple needs to spend big in response.

Dithering with Ben Thompson and Daring Fireball’s John Gruber

• Apple Alarm
• io

Asianometry with Jon Yu

• EUV Photoresists: The Next Generation?
• The Long, Hard End of the Chilean Nitrates Industry

Sharp China with Andrew Sharp and Sinocism’s Bill Bishop

• Chips and the Geneva Consensus; US Policy and the Chinese Century; Controversy Over Solar Power Inverters

Greatest of All Talk with Andrew Sharp and WaPo’s Ben Golliver

• OKC Survives and Looks Dominant, A New Era in the West, Revisiting the Lottery and Ideas for the Spurs
• Emergency Pod: A Bing Bong Nightmare, Haliburton Heroics and a Stunning Game 1 in New York City

Sharp Tech with Andrew Sharp and Ben Thompson

• The U.S. Partners with the Middle East in AI, Why OpenAI Is Acquiring Windsurf, Google’s Side of the Platform Wars
• OpenAI Enters the Hardware Business, The Challenges and Opportunities for Jony Ive, Takeaways from Google I/O 2025

This week’s Sharp Tech video is on Apple’s risks as their App Store battles continue.