Welcome back to This Week in Stratechery!
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On that note, here were a few of our favorites this week.
- Individualization at Scale. Spotify had a fantastic result in its quarterly earnings, but I thought the earnings call commentary — it was former CEO and founder Daniel Ek’s last — was worth a deeper examination into the reality of modern network companies. Spotify is a music streaming service that everyone is familiar with, but the actual experience of every Spotify user is unique. That’s a feature of every monolithic network-effects company, and explains why such companies are poised to be big winners from AI. — Ben Thompson
- CapEx Explosions and Distinctions. The most amazing thing I read this week was a note from a Sharp Tech emailer who observed that the combined project capital expenditures of Amazon, Google and Meta in 2026 — more than $700 billion — net out to nearly two-thirds of the annual budget for the U.S. Department of Defense. Where is that money going, and how scared should investors be? The answer there varies. On Monday, Ben explained why Google’s plans make perfect sense given the nature of the business and their results over the past few years. Tuesday’s Update told a different story about Amazon: their spending is defensible, but shareholders who are anxious have a few good reasons to be. — Andrew Sharp
- The Interviewer Becomes the Interviewee. As Ben’s friend and colleague, I loved the inversion we got from this week’s Stratechery Interview, cross-published from Stripe Preisdent John Collison’s Cheeky Pint podcast. This was Collison interviewing Ben, talking from everything from the difference between pre- and post-smartphone Japan, Meta’s allergy to advertising evangelism, why Ben doesn’t cover TikTok as much, and Stratechery’s business model (which was in part enabled by Stripe). The 90-minute conversation was a delight and is also available to watch on YouTube, if you’d like to see what Stripe’s on-premise pub looks like and get pretty jealous. — AS
Stratechery Articles and Updates
- Google Earnings, Google Cloud Crushes, Search Advertising and LLMs — Google announced a massive increase in CapEx that blew away expectations; the companies earnings results explain why the increase is justified.
- Amazon Earnings, CapEx Concerns, Commodity AI — Amazon’s massive CapEx increase makes me much more nervous than Google’s, but it is understandable.
- Spotify Earnings, Individualized Networks, AI and Aggregation — Spotify’s nature as a content network means that AI is a sustaining technology, particularly because they have the right business model in place.
- An Interview with Ben Thompson by John Collison on the Cheeky Pint Podcast — An interview with me by John Collison on the Cheeky Pint podcast about AI, ads, and the history of Stratechery.
Sharp Text by Andrew Sharp
- Takaichi, Tanking and Legalization Lessons — On landslide elections in Japan, fixing a mess in the NBA, and a defining political challenge for the next generation in the United States.
Dithering with Ben Thompson and Daring Fireball’s John Gruber
Asianometry with Jon Yu
Sharp China with Andrew Sharp and Sinocism’s Bill Bishop
Greatest of All Talk with Andrew Sharp and WaPo’s Ben Golliver
Sharp Tech with Andrew Sharp and Ben Thompson
This week’s Stratechery video is on Microsoft and Software Survival.