E168: Can Google save itself? Abolish HR, AI takes over Customer Support, Reddit IPO teardown

Friedberg said Google’s Gemini failure has triggered a real internal shift: employees who previously feared being branded racist for challenging Responsible AI decisions now feel able to question that team’s authority. He said investors care less about the politics than what the episode implies about Google’s ability to defend Search, its dominant profit engine.

Google’s vulnerability is unusually concentrated: the panel put Search revenue near $50 billion a quarter and argued its margins account for most of Alphabet’s true operating profit. That makes even modest search-share losses strategically important, while Cloud is the clearest internal hedge if AI weakens Google’s search dominance.

AI companies are beginning to pay meaningful sums for proprietary training data: Reddit disclosed about $203 million of AI licensing deals over two to three years, including Google’s roughly $60 million-a-year agreement. The panel’s key uncertainty was durability—fresh, continuously generated data may command recurring value, while static archives can depreciate quickly.

Klarna’s AI support assistant had already handled 2.3 million conversations, about two-thirds of support chats, while doing work equivalent to 700 agents and cutting resolution time from 11 minutes to two. Klarna projected a $40 million profit lift, and Teleperformance promptly lost roughly 20% of its market value.

Chamath said none of the companies he controls has a traditional HR department: managers own hiring, employee committees design benefits, serious complaints go to outside employment lawyers, and the bottom 5–10% are managed up or out annually. His model deliberately removes HR as an internal gatekeeper while keeping legal investigations independent.

Reddit’s IPO filing showed a business with strong engagement but weak monetization: 2023 revenue was $804 million, gross margin 86%, net loss $91 million, and daily active uniques about 76 million. Recent user growth accelerated to 27% year over year, but ARPU remained only $3.42 and had slipped 2%.

A former Reddit CEO’s old account described a possible step-by-step effort to regain independence from Condé Nast by creating a separate cap table, bringing in an outside investor, and eventually spinning Reddit out. Whether premeditated or not, Condé Nast’s parent still owned about 30%, potentially worth $1.5 billion at a $5 billion IPO.

Apple finally killed Project Titan after roughly a decade, billions of dollars of investment and about 2,000 employees, abandoning plans for a roughly $100,000 self-driving electric car. The report said many staff would move into generative AI while others would be laid off, marking a sharp reallocation toward AI.