Benedict's Newsletter: No. 623

In this issue: Tiktok deal, ASML, Agentic UX, New TV, EV, Warfare, Chinese fist fights, Jetway Jesus - and the annual review

NO. 623   FREE EDITION   SUNDAY 21 DEC 2025 SPONSORED BY ROLAND BERGER The conversation around Artificial Intelligence is intensifying. Beyond the current focus on chatbots and generative models, a more fundamental transformation is taking shape: the rise of AI Agents. For Roland Berger, a renowned Forbes Top 5 global management consultancy, these are not merely tools for simple task automation. AI agents are sophisticated, self-directed digital entities capable of complex reasoning, planning, and executing multi-step processes across diverse systems to achieve strategic goals. Read more on the rise of AI agents here.. Less hype. More results. My work AI eats the world Twice a year, I produce a big presentation exploring macro and strategic trends in the tech industry. New in November 2025, 'AI eats the world'. LINK Podcast: how does OpenAI compete? OpenAI has all the mindshare and 800m weekly active users, but the models remain commodities, and platforms with their own distribution are coming up fast. How will it compete? How will any of this work? How can you differentiate AI? LINK News Is the TikTok deal finally happening? This deal is Groundhog Day, but it looks like it's finally happening, with the company actually signing the deal to spin off the US assets into a consortium led by Larry Ellison (whose family also owns Paramount / CBS and is trying to buy Warner Bros.) and Silverlake. Bytedance will keep 19.9%, though the Chinese government still has to agree. Note that MGX, the Abu Dhabi state investment firm, is in the deal - there are also petrodollars in the Warner bid. As before, it is striking how cheap this deal is - $14bn where analysts were estimating up to $50bn, given that it has US revenue of at least $10bn. LINK Agentic interfaces  Following my notes on agentic interfaces last week, Google released A2UI, a framework for LLM agents to generate GUIs in a standardised way. Worth comparing to OpenAI's developer doc of UX principles for agents. This all feels very 1997, when the web was clearly going to be huge but no one really knew how it should work and there were no standards for all the basic building blocks that developers and designers wanted to use. Remember 'This site best viewed in Netscape' buttons? So, you make your own tech, and try to use your market share to make them standards, or use your standards to capture market share. GOOGLE, OPENAI Amusingly, OpenAI also has a set of app submission guidelines, which read exactly like Apple's early app store guidelines. Everyone wants to be a gatekeeper. LINK China cloning ASML? Reuters has a big splash saying that China has a huge 'Manhattan project' to clone ASML's semiconductor fabrication equipment so that China can make cutting-edge chips, based on a team of former ASML engineers. Of course they do, this is always the playbook, and in the long term this is probably inevitable, but China has been trying to catch up for a generation without getting anywhere close, and TSMC is ahead for a lot more reasons than just buying ASML equipment. LINK The week in AI Amazon is in talks to invest $10bn in OpenAI, closing another loop: it also has investments in Anthropic, while Microsoft also has investments in both. LINK Amazon re-organised its AI group and changed the leadership. (It is fascinating that Microsoft and Amazon have spent three years trying to get onto the leaderboards and can't crack the top 10, while Xiaomi made it there this week.) LINK Databricks is raising $4bn at a $134bn valuation. Remember those things called 'IPOs'? Also, apparently this is a Series *L*, which I've never seen before. LINK OpenAI hired a senior product head from Shopify. More agentic commerce aspirations coming. LINK UPS is buying hundreds of robots for unloading trucks. Not humanoids - very traditional-looking arms with a lot of very non-traditional AI, from 'Pickle Robotics' (great name). LINK Meta is shifting a lot of budget to AI from the VR-focussed 'Reality Labs', which may be why this week it paused the third-party headset programme that it announced last year in an attempt to catalyse an ecosystem. But then, this isn't a mass-market consumer product yet anyway, so maybe it's switching emphasis to making the product itself more viable? LINK Age verification Australia's ban on under-16s using 'social media' has taken effect, with predictable definitional challenges (WhatsApp, Roblox, and Discord aren't covered). The law requires either AI age estimation, which is pretty unreliable, or uploading a government ID, if you have one, which comes with its own challenges - see the next story. LINK Viewing data for Pornhub premium subscribers was affected by a breach last month at MixPanel, an analytics platform, and the hackers are now trying to extort payment. This prompted a lot of prurient schadenfreude, but it also hints at the problem with demanding such companies collect IDs. LINK New money With the US loosening financial regulation, PayPal has applied for a banking licence, so that it can offer small business loans and savings accounts directly rather than going through licensed intermediaries. This may be the only company that can deliver a worse experience than a traditional bank, which I suppose is one kind of differentiation… LINK Meanwhile, Visa is doing more stablecoin stuff. LINK New TV I'm not following the Warner/Netflix/Paramount take-over battle, because I'm interested in tech, and this is a matter for M&A bankers and TV analysts. But this week YouTube bought the rights to show the Oscars live, winning them from ABC, which has had the deal since 1976. Tell me again how YouTube isn't TV. LINK The great car reset I am equally hesitant about how far to dig into the EV transition, which seems to me almost entirely a conversation for automotive analysts. Tesla pointed to the opportunity, but has fumbled model releases while the CEO's antics have wrecked the brand, and pumps retail demand for the stock with promises of autonomy that never arrive. Legacy manufacturers struggle with the cost and execution of the transition, and demand is behind their hopesL This week Ford is taking a $19.5bn charge as it slows down the shift and cancels the electric version of its best-selling F150 pickup, while the EU has pushed back its planned 2035 ban on internal combustion engines. But meanwhile, China is running the same playbook we saw with smartphones: hundreds of manufacturers winnowed down to a few champions, with domestic overcapacity and subsidies, and then a global wave. BYD is hiccupping, but Marques Brownlee (the current king of YouTube gadget reviews) loves Xiaomi's car, and Ford's CEO keeps saying the same. FORD, EU, XIAOMI, CEO Just to emphasise the point, this week California, a decade late, finally told Tesla that it cannot use the terms 'autopilot' and 'full self-driving', since Tesla cars do not, as a matter of fact, have full self-driving capabilities and no-one knows when (or if) they will. LINK Naval drones The war in Ukraine continues to be a testing ground for new concepts, although the uniqueness of the situation should prompt caution (the Spanish Civil War had mixed lessons for WW2, and the Balkan wars little about WW1). But this week the Ukrainians used an underwater drone to enter a Russian harbour and cripple a submarine. LINK Chinese tech regulation Staff at PDD got into at least two fist fights with staff from a Chinese regulator investigating fraudulent deliveries. I wonder if this lobbying model will spread - UFC versus FTC could get record viewing. LINK About What matters in tech? What's going on, what might it mean, and what will happen next? I've spent 25 years analysing mobile, media and technology, and worked in equity research, strategy, consulting and venture capital. I'm now an independent analyst, and I speak and consult on strategy and technology for companies around the world. FIND OUT MORE Ideas Andrey Karpathy wrote a good non-technical write-up of technical developments in generative AI this year. LINK And Matt Turck wrote up the venture/startup/SaaS perspective. LINK Mapping the SIM farms that enable fake accounts, spammers and manipulation. LINK A one-hour interview with Sam Altman. Worth listening to the whole thing, but one quote stuck out for me quite tangentially - pointing out that the term 'AGI' means different things to different people: "There's a lot of people that would say we are at AGI with our current models." LINK The Information says Google has set up an internal committee to allocate finite compute resources between different AI projects. LINK Gossip from the Information that OpenAI optimised model development for benchmarks that focused on complex and obscure maths and scientific puzzles, and was then surprised that those don't map well to normal consumer use cases. This puzzles me. I have always thought of benchmarks as trying to say something about underlying conceptual capabilities (and of course in how much they're being gamed). I didn't realise that the people who work on them would think users really wanted a model that can do the actual tasks in the evals. LINK Back in the real world, while we're all told to get excited about agentic shopping Right Now, here's an adversarial analysis of how well the latest models respond to questions about products that don't exist. Mostly, they drop straight to hallucination. LINK Conversely, Nieman has a good overview of use cases in journalism. LINK And Nokia wrote about telco use cases. LINK Meanwhile, one strand of private investment in AI (especially for the 99% of funds that can't get an allocation in the latest OpenAI round) is to back sector roll-ups: a startup raises cash to buy a bunch of companies in a legacy service industry to consolidate and optimise them with LLMs - healthcare brokerage, customer services, insurance, logistics, etc. I can see the logic, but these kinds of structures are always popular in bull markets. LINK With Trump trying to block state-by-state AI regulations in favour of one federal rule book, A16Z, which is deeply connected to the technocratic side of his administration, published a proposal for what that rule book might want to address, looking both at protecting against tangible harms (children, consumer abuse, cyber) and at driving investment. (NB: I worked at A16Z from 2014 to 2019.) LINK Bloomberg found that around 90% of H1-B hires at Tata Consulting, Infosys, and Cognizant would be covered by the new $100k fee. LINK Outside interests If you need a last-minute Christmas gift, there's always the Cloud Appreciation Society. LINK Apparently, the new most obnoxious thing to do at an airport is booking a wheelchair to take you to your gate when you don't need it. When these people suddenly get up and walk to their seat, airline staff talk about 'Jetway Jesus'. This would make a great Seinfeld episode. LINK RIP John Olson, who was fired after refusing to make Enron a Buy. LINK Data Cloudflare's year in review - lots of data on LLM robots scanning web pages. LINK Gallup says generative AI DAU at work in the USA is about 10%, versus 23% WAU. LINK People watched 700m hours of podcasts on YouTube on their TVs in October, almost double the number a year ago. (For context, Netflix does about 15bn hours a month, and its top show got about 75m hours last week.) LINK, NETFLIX The value of music copyright in 2025. LINK Last but definitely not least, someone claims to have scraped the vast majority of Spotify, downloading 300TB of music with 256m tracks and all the associated metadata and making it available as a torrent (remember those?). This will be very tempting to anyone building an AI model for music (remember the Anthropic books case!), but the popularity data might be most valuable - a giant set of human feedback? LINK Preview from the Premium edition AI, 2025 and 1997  I took 65 flights this year, and gave a lot of presentations to a lot of people, because lots of things are changing. Indeed, things are changing so much that I moved from making one macro tech trends deck to two. This is the last newsletter issue of the year, and so I'm supposed to write a recap of everything that changed, and there's a lot you can say, but looking back, it seems to me that the important thing is how much the conversations have become separated and specialised. ChatGPT blew up three years ago, and for at least the first two years there were only a pretty narrow set of questions: how much better would the models get, how many would there be (would Google/China/open source catch up?), and how far could the models just do 'the whole thing' versus needing lots of product on top. Now all the conversations have broken apart, from the top to the bottom of the stack, and there are three-hour podcasts for all of them.  So, we now have detailed analysis about 'infra', which splits into chips, data centres, electricity generation and connections. Faster chips haven't really meant much to anyone further up the stack since the 90s, and data centres haven't been interesting to non-specialists since the early days of Google, but now these are the stack and they're the Upgrade to Premium You're getting the Free edition. Subscribers to the Premium edition got this two days ago on Sunday evening, together with an exclusive column, complete access to the archive of over 600 issues, and more. UPGRADE THIS WAS SENT TO abdulkerim.bosnia.business@blogger.com ON 23 December, 2025, BECAUSE YOU SUBSCRIBED AT BEN-EVANS.COM. You can UNSUBSCRIBE, OR READ THE PRIVACY POLICY. OUR MAILING ADDRESS IS Benedict Evans, 2 Golden Square, London, W1, United Kingdom.   COPYRIGHT © 2013-2025 Benedict Evans, ALL RIGHTS RESERVED.