Welcome back to This Week in Stratechery!

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

1. Tech’s Looming Chip Problem. My first obsession in tech was semiconductors, back when every new generation provided such astronomical gains that it fundamentally shaped how the entire software industry approached development. Then, for a few decades, semiconductors faded to the background: yes, they matter, but they were commodities, both in terms of availability and ongoing costs. Today, however, chips matter more than ever thanks to AI. Yet even though it’s no longer an esoteric topic, I actually think that the industry is not thinking about them enough: today we have chip shortages, but if demand doesn’t take the initiative to restructure supply than the shortages looming by the end of the decade could dramatically curtail AI’s impact and, by extension, the entire industry’s revenue potential. — Ben Thompson
   

2. What Is Meta Doing, and Why? Thursday’s Daily Update was a return to Stratechery’s bread and butter: unpacking Meta’s latest earnings announcement and explaining why Wall Street might be overreacting to the results. Come to read how Meta beat expectations again (continuing a trend that began in Q2 2025), and stay to learn why, despite Wall Street’s apparent permission to spend up to $135 billion on AI infrastructure, there are fair questions to ask of Zuckerberg’s enormous bets. We doubled back to discuss all this on the podcast this week, including thoughts on whether Zuckerberg is ultimately stuck in the same box he’s been in for years — the world’s most successful app developer, yearning to be something more — and the stark contrast between Apple and Meta in the AI era. — Andrew Sharp
   
   
3. Disappearing PLA Generals and “De-Risking.” The past few weeks have seen both Canada and the U.K. make outreach to the Chinese government to gin up new business and de-risk from the U.S.; on Sharp Text, I wrote about why that’s a bad idea (and why the fawning over Mark Carney’s Davos speech annoyed me). Elsewhere, a warning: we don’t have many answers as to what the hell is happening at the top of the PLA, but Xi has now purged 5 of the 6 appointees of the Central Military Commission, and 50 senior officers since 2023, including his number two in command, Gen. Zhang Youxia, last weekend. This week’s episode of Sharp China probes the questions raised by all this (for Taiwan, for Xi, was Zhang leaking nuclear secrets to the US?) and it was a terrific coda to a week of rampant speculation in the wake of genuinely seismic China news. — AS

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Stratechery Articles and Updates

• TSMC Risk — If hyperscalers and chip companies don’t build up a TSMC competitor they are set to forego billions of dollars in revenue and stunt the AI revolution.
• Intel Earnings, The Agentic Opportunity, Intel’s Mistaken Pessimism — Intel’s earnings were disappointing because the company is missing a huge opportunity by virtue of selling off its capacity.
• An Interview with Kalshi CEO Tarek Mansour About Prediction Markets — An interview with Kalshi co-founder and CEO Tarek Mansour about the value of prediction markets.
• Meta Earnings, Turning Dials, Zuckerberg’s Motivation — Meta is up, despite massive CapEx plans. The company is turning every dial to drive revenue, because Mark Zuckerberg thinks winning in AI is existential.

Sharp Text by Andrew Sharp

• The Scorpion and the Frogs — As world leaders look to China to de-risk from the U.S., it’s worth considering how we got here.

Dithering with Ben Thompson and Daring Fireball’s John Gruber

• TSMC CapEx
• Meta’s Tim Cook Doctrine

Asianometry with Jon Yu

• Toshiba’s Breakthrough Laptop PC
• The Japanese AI Boom Needs A Little More Ambition

Sharp China with Andrew Sharp and Sinocism’s Bill Bishop

• 10 Questions on the Detention of Zhang Youxia, Corruption in the PLA, Rumors, Messaging, and Taiwan

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

• The Luka Trade One Year Later, The Hottest Team in the NBA and an OKC Reality Check, Another Giannis Injury

Sharp Tech with Andrew Sharp and Ben Thompson

• Meta’s Plans to Spend $135 Billion, The ‘AI Bubble’ Bubble?, Why Hyperscalers Should NOT Invest in TSMC

This week’s Sharp Tech video is on the Apple Vision Pro not getting live events right.