The Stratechery Year 2023 In Review - Stratechery By Ben Thompson

Over a decade of Stratechery has passed; This is the 11th annual review I have published. You can find previous years here:

Contents

I am proud and grateful at the same time to have reached this milestone. Strategy changed my life; I hope it had some small impact on you.

At the beginning of last year's review, I said that the biggest story in technology was the emergence of AI; I can say the exact same thing about 2023, but even more: 12 of Stratechery's free weekly articles were about AI in some way, shape, or form. The second largest theme was a core theme of Stratechery: the evolving content landscape; But 2023 has been particularly notable for the dramatic changes hitting Hollywood, highlighted by both strikes and the Disney charter standoff this fall. There were also big stories about the tech industry itself, from a bank failure to boardroom drama, and a “vision” of what might come next.

This year, Stratechery published 27 free articles, 105 subscriber updates and 37 interviews. Today I traditionally summarize the most popular and important articles of the year.

The five most viewed articles

The five most viewed articles on Stratechery by page views:

From Bing to Sydney – Microsoft has introduced a new conversational user interface in Bing based on GPT-4; I got early access, discovered Sydney, and had a series of conversations that blew me away.

The Four Horsemen of the Tech Recession – Thanks to the COVID hangover and Apple's app tracking transparency, the tech industry is becoming increasingly disconnected from the real economy.

OpenAI's misalignment and Microsoft's win – The end of a dramatic weekend in tech is that OpenAI has split and Microsoft is partnering with one and hiring the other; This is the ultimate case of a failure of what should have been a for-profit company that was misorganized.

Apple Vision – Apple Vision is incredibly compelling, firstly as a product and secondly in terms of potential use cases. However, the statements about society are somewhat more pessimistic.

The End of Silicon Valley (Bank) – Silicon Valley Bank bears responsibility for its downfall, but it symbolizes a Silicon Valley reality that is very different from the myth – and the ultimate cause is technology itself.

AI strategy

Is AI a sustainable technology that makes existing companies stronger or a disruptive technology that creates new entrants?

AI and the Big Five – Given the success of existing companies in new eras, the most obvious place to start when thinking about the impact of AI is the Big Five: Apple, Amazon, Facebook, Google and Microsoft.
Google I/O and the coming AI battles – Google A/I points out that AI is a sustainable innovation for all Big Tech companies; This means that the real battle is between incumbents and Big Tech on one side and open source on the other.
Windows and the AI platform shift – Microsoft has argued that there is an AI platform shift, and the fact that Windows is interesting again – and that Apple is facing AI-related questions in its latest products – is evidence of this correct is.
The OpenAI Keynote – OpenAI's developer keynote was exciting, both because AI was exciting and because OpenAI has the potential to become a major consumer tech company.
Google's True Moonshot – Google could win more than just the chatbot war: It's the only company that could develop a universal assistant. The question is whether the company is willing to risk everything.

AI questions and philosophy

AI raises more than just strategic questions: it raises questions about the nature of computing, the future of society, and what it means to be human.

ChatGPT is getting a computer – It's possible that large language models are more similar to the human brain than we thought when it comes to predictions; That's why ChatGPT requires its own computer in the form of plug-ins.
AI Philosophy – AI-generated content will not harm those with the ability to breakthrough: it will make them stronger, backed by Zero Trust Authenticity.
Nvidia on the mountaintop – Nvidia has gone from valley to mountaintop in less than a year thanks to ChatGPT and the excitement it has generated; Whether there is a cliff or not depends on the development of new types of requirements that only GPUs can meet.
AI, hardware and virtual reality – Defining virtual reality as something to do with hardware misses the point: virtual reality is AI, and hardware is an (essential) means to an end.
Regrettable Accelerationism – The Internet has removed the limitations from the analog world, and AI is finishing the job. That this could be the final blow to the Internet as a source of truth could ultimately be for the best.

Streaming and Hollywood

While the past, present and future of content has always been the focus of Stratechery, this year seemed to be a turning point for Hollywood in particular.

The New Chapter of Netflix – Netflix survived the Blockbuster with better economic conditions and today is trying to do the same with its competitors; However, the key to company differentiation increasingly lies in creativity and not implementation.
The Unified Content Business Model – Every content company is or should be moving to a model that includes both subscriptions and ads. Creator platforms should help their publishers do the same.
Hollywood on Strike – The Hollywood strike pits talent against studios, but the problem is that both are jointly threatened by the reality of the Internet and zero distribution costs.
Disney's Taylor Swift Era – Not even Taylor Swift can fight the devaluation of recorded music, but she makes up for it through physical experiences; Things aren't much different at Disney, but things look a lot worse given the company's old business model.
The Rise and Fall of ESPN's Leverage – Charting the rise of ESPN, including how it builds leverage over cable television providers, and its continued decline caused by the Internet (see also: Charter Winners and Losers -Disney).

regulation

For better or worse, it's impossible to cover technology without discussing regulation, and 2023 was no different.

Amazon, Friction, and the FTC – The FTC's Amazon complaint raises some valid points in isolation, but misses the bigger picture, both as it relates to Amazon specifically and the Internet in general.
FTC is suing Amazon – The FTC is suing Amazon and some of the complaints are compelling, but ultimately unconvincing.
China Chips and Moore's Law – Moore's Law is not dead yet, nor is Moore's Commandment, even if the AI calculates differently. Addressing both is key to the success of the China chip ban.
Mitigating Innovation (AI) – Innovation required humility about the future and openness to what might be possible; Biden's executive order banning AI development is the opposite: it blocks progress and hinders solving our biggest challenges.

Stratechery Interviews

On Thursdays, Stratechery features interviews – in podcast and transcript form – with public company executives, private company founders and executives, and other analysts.

Interviews with managers of public companies:

Interviews with startup/private company executives:

Analysts:

The Year of Stratechery Updates

Some of my favorite stratechery updates:

March 20: The two philosophies of Microsoft Office AI, Copilot and Tech: Business Chat and Appropriate Fear
March 28: The Accidental Consumer Tech Company; ChatGPT, Meta and Product-Market Fit; Aggregation and APIs
April 10: Substack notes, Twitter blocks Substack, Substack against authors
May 1: The Phoenix Suns go over radio, fans and franchise valuation, attention and customer acquisition
May 8: Shopify leaves Logistics, The Shopify Logistics Side Quest, Where to Buy with Prime
May 10: Meta Open Source introduces another AI model, Moats and Open Source, Apple and Meta
June 12: Reddit revolt, Apollo and Reddit changes, complementary complaints
June 21: Electric vehicle charging standards, Tesla's strategy, Tesla's reward
June 28: Starlink Solution, Starlink Experience, Starlink Implications
July 12: Microsoft can take over Activision, The FTC vs. the Record, The FTC's failed vendetta
August 21: Adyen results, Adyen's European context, Adyen vs. Stripe
September 6th: Amazon and Shopify, Shopify and its merchants, The payment question
September 11: The Huawei Mate 60 Pro, 7nm background, implications and reactions
September 18: Change in Unity's business model, Unity strategy, questions about Unity leadership
October 4: Spotify Subscription Audiobooks, Casual Fans and Bundles, Spotify's Goals
November 8: Agents lose in court, Zillow and real estate aggregation, from franchises to corporations
November 13: Disney Earnings, Disney 3.0, Streaming and Sports
December 4th: The College Football Playoffs, Events Over Inventory, NASCAR's New Deal
December 12: Google loses antitrust case to Epic; The Differences Between Apple and Google, Revisited; The commitment question
December 13th: Data loss at Netflix, power laws, Netflix's motives

I am so grateful to the subscribers for making it possible for me to pursue this profession. I wish you all a Merry Christmas and a Happy New Year and look forward to a great 2024!

The Stratechery year 2023 in review – Stratechery by Ben Thompson