Inside the collapse of the internet economy (and what comes next)
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Today, I am thrilled to welcome Matthew Prince, the CEO of Cloudflare. It's a company that sits at the very heart of the internet. You might not know of it, but I'm pretty certain that at some point in the last 24 hours, Cloudflare has helped you get something done on the web. The company funnels about a fifth of all internet traffic to us. Now, as we move into the age of AI, Matthew is once again at the heart of thinking about how that technology is going to affect the internet at scale. And that's what we're going to talk about today. Viewers know I love the pipes of the internet, and that means I have a soft spot for this company. I've even got the t-shirt. But that doesn't mean I'm going to give our guest an easy ride.
Welcome to the show, Matthew. Thanks for having me. We're at an inflection point in the way the internet gets used. How broken is the content model that has funded it for the last 25 years?
Yeah, I think that actually it's been amazing how well that has worked for the last 25 years. The basic interface of the web for the last 25 years has been search. And Google obviously is the dominant search engine out there. And the way that Google works that you all know is if you type something into Google, especially this sort of Google of 10 years ago, you got back what was effectively a treasure map, a bunch of links pointing you to search. The search wasn't the act of Google returning the links. You then had to continue the search to find what it was that you were looking for. And in the process of doing that, you generated traffic to a bunch of sites on the web. And Google actually, and some other companies, provided the tools that then allowed those content creators, those site owners, turn that traffic into revenue or turn that traffic into ego, just knowing that someone was reading it.
What's happened, and it really started about eight to 10 years ago, it's picked up speed over the course of the last year, is that we're switching from a web where the primary interface is search and search engines to one where the primary interface is AI and what I would call answer engines. go to ChatGPT and you type a question, it doesn't give you a list of links to go to. It gives you the answer. And in fact, even Google today, if you go to it and ask a question, increasingly it's putting on the top of the page what they call AI overviews. And those AI overviews are essentially answers to whatever question you have. And the problem with that is you're not sending traffic then to the rest of the web.
And so if the currency that the web was built on, the currency that funded the web was traffic, the problem is that as we switch from search engines to answer engines, that currency is going away. And so we've got to figure out some other way to compensate those content creators to make the content, which is what fuels fundamentally the web and even what fuels these AI engines.
As you say, it's something that's been going on for a few years. I think Google was early with this idea of the one box, the one box at the top that constructed an answer and delivered what we wanted, which is we wanted the temperature in X, or we wanted to know the answer to a simple recipe. And this seemed to be, as you say, the evolution. But there is this change because As people move towards ChatGPT, and I think OpenAI claim 700 to 800 million weekly users of ChatGPT, and I think there's some evidence that for every year that you use ChatGPT, you do 8% fewer Google searches. That starts to, as you say, break this relationship. But I'm just curious about whether... What we're seeing is the amber warning signal, or is it the red light?
It's a pretty significant warning signal. The first thing is that the answer isn't to fight progress. Answer engines are a better experience for users. If you think about sci-fi films, which predict a lot of our future, when you ask the helpful robot, what's the temperature outside? It didn't say, well, here are 10 links that you could follow to figure out what the temperature is outside.
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