Welcome back to This Week in Stratechery!

As a reminder, each week, every Friday, we’re sending out this overview of content in the Stratechery bundle; highlighted links are free for everyone. Additionally, you have complete control over what we send to you. If you don’t want to receive This Week in Stratechery emails (there is no podcast), please uncheck the box in your delivery settings.

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

1. Frothiness and the Future. One of the through lines of Stratechery is the reality of trade-offs: you don’t get upside without risking downside, and, more frequently than not, you get both at the same time. Perhaps the ultimate example are bubbles, where the downsides of a bubble popping are clear, painful, and widely felt. What is important to keep in mind, however, is that The Benefits of Bubbles are not just a silver lining: they are in fact what drives humanity forward. Or, to put it another way, the downsides of bubbles are so severe precisely because the upsides are so remarkable. — Ben Thompson
   

2. Amazon’s Future in AI and Groceries. Talking about Amazon is always tricky because who expected your retailer to be your cloud provider? To that end, Ben’s Daily Update about Amazon’s earnings had two distinct parts: AWS and its deal with OpenAI, and the company’s latest approach in its decade’s long attempt to crack the grocery market — maybe the answer was to simply make delivery faster for everything? Thursday’s interview with Michael Morton brought these two threads together, as they discussed how AI-driven e-commerce will impact Amazon, particularly since Walmart, its oldest and greatest rival — and grocer extraordinaire — is all-in.  — Andrew Sharp
   
   
3. The US-China Trade Deal One Week Later. The US and China brokered a trade deal in South Korea last week, as both sides made concessions that should bring a bit of short term stability to the most significant bilateral relationship in the world. We broke it all down on a free episode Sharp China this week, including why China is incentivized to preserve the status quo until at least April, and the risks inherent to any U.S. agreement to withhold future actions to address supply chain dependencies (legacy chips, active pharmaceutical ingredients, or shipbuilding). Looming in the background, meanwhile, was the legality of Trump’s tariffs: I not only think they are technically legal, but they are also consistent with the purpose of the law he cites for authority. — AS

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Stratechery Articles and Updates

• Google Earnings, Meta Earnings, The Cost of Reality Labs — Google’s earnings are great, and GCP alone justifies more capex; Meta, meanwhile, is being punished for not having a clear product application for AI.
• Amazon Earnings, AWS and OpenAI, Did Amazon Solve Groceries? — Amazon says the constraint right now is power, not chips; it’s giving plenty of the latter to OpenAI. Then, Amazon solves groceries by getting faster tat delivering everything else.
• The Benefits of Bubbles — We are in an AI Bubble: the big question is if this bubble will be worth it for the physical infrastructure and coordinated innovation that result?
• An Interview with Michael Morton About AI E-Commerce — An interview with Michael Morton about AI-driven e-commerce, and why this is both Amazon’s category to lose and a threat — and a big opportunity for Walmart and Shopify.

Sharp Text by Andrew Sharp

• A Dissenting View on Trump’s Tariffs — Trump’s signature foreign policy has been more effective and appropriate than its initial critics predicted, and it’s consistent with text and purpose of the law he claims for authority.

Dithering with Ben Thompson and Daring Fireball’s John Gruber

• Google Siri
• Google and Apple Go Full Circle

Asianometry with Jon Yu

• TSMC’s Incredible 2nm Curvy Masks

Sharp China with Andrew Sharp and Sinocism’s Bill Bishop

• The US-China Deal One Week Later: Why Short-Term Stability Is Likely, Costs and Benefits of Escalation, and More Adventures with Nvidia

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

• The Pelicans Are the George Washington of Mount Roastmore, Bucks, Bulls and Sixers Ecstasy, A 4-GOAT Wedding in England
• Ja Morant Crashing Out Before Thanksgiving, Notes on the Lakers and a Theory on the Warriors, A Vision for the East

Sharp Tech with Andrew Sharp and Ben Thompson

• OpenAI Wants Help from the Government, Apple Taps Google for AI, Q&A on Bubbles, Amazon Groceries, and YouTube TV

This week’s Sharp Tech video is on Substrate’s Moonshot.