(#110) The Stargate Project ($500 bn); Netflix bull case
Samgung’s new phones: more AI
Starting this week, On Strategy gets sharper. Alongside insights into why companies do what they do, I’m introducing principles: concise, actionable truths to guide your thinking. Not buzzwords or filler, but enduring ideas you can carry into meetings, decisions, and conversations.
Strategy isn’t just analysis, but it’s about principles that work when the stakes are high.
The Stargate Project: $500 billion over the next four years building new AI infrastructure for OpenAI in the United States
From the press release:
“The initial equity funders in Stargate are SoftBank, OpenAI, Oracle, and MGX. SoftBank and OpenAI are the lead partners for Stargate, with SoftBank having financial responsibility and OpenAI having operational responsibility. Masayoshi Son will be the chairman.
Arm, Microsoft, NVIDIA, Oracle, and OpenAI are the key initial technology partners. The buildout is currently underway, starting in Texas, and we are evaluating potential sites across the country for more campuses as we finalize definitive agreements.
As part of Stargate, Oracle, NVIDIA, and OpenAI will closely collaborate to build and operate this computing system. This builds on a deep collaboration between OpenAI and NVIDIA going back to 2016 and a newer partnership between OpenAI and Oracle.” LINK
The European mind cannot comprehend this scale and what’s really happening. On the other hand, things get a little complicated in the bromance between OpenAI and Microsoft:
1/ The Stargate initiative, as outlined in the blog release, reflects a profound shift in OpenAI’s trajectory, signaling a move away from Microsoft’s umbrella while securing its own infrastructure through SoftBank and other investors. This separation highlights the growing divergence between OpenAI’s pursuit of AGI and Microsoft’s emphasis on commoditizing AI to fuel its enterprise ecosystem. Stargate secures the compute capacity OpenAI needs for its ambitions and positions it as the central figure in a transformative, $500 billion bet on AI infrastructure.
2/ At its core, the separation is a misalignment that has been brewing since the launch of ChatGPT. Once a research-focused entity complemented by Microsoft’s infrastructure, OpenAI’s pivot toward becoming a consumer tech giant fundamentally changed the stakes. For Microsoft, AI models have become tools to enhance its core products, such as Azure and Copilot. For OpenAI, however, the focus shifted to leadership in the AI arms race, requiring bold investments in training and inference at a scale that Microsoft seems hesitant to support.
3/ The creation of Stargate signals OpenAI’s readiness to build autonomy and its ability to attract high-stakes investments, even as critics like Elon Musk question the financial solidity of its backers. This split from Microsoft, though challenging, aligns with OpenAI’s need for a supportive ecosystem prioritizing AGI and innovation over immediate monetization. While it may mark the end of a high-profile partnership, it potentially lays the foundation for OpenAI to emerge as a leader in defining the future of AI, both in infrastructure and application. LINK
Samgung’s new phones: more AI
New year, new phones, but what does this mean?
1/ Samsung’s unveiling of the Galaxy S25 Ultra positions the company as a leader in integrating AI into smartphones. Leveraging Google’s Gemini AI and Qualcomm’s Snapdragon 8 Elite processor, Samsung’s focus is on creating a voice-driven experience that moves beyond traditional touchscreens. This aligns with its goal to challenge Apple’s dominance by offering AI capabilities across multiple apps and languages, a clear advantage over Apple’s slower rollout of similar features.
2/ Hardware changes, like the shift to flat edges and upgraded ultrawide cameras, complement software improvements in the One UI 7.0 interface. Features such as automatic routines and cross-app AI actions make the device feel more responsive to users’ daily lives. However, the absence of significant hardware innovation and the downgrading of the S Pen’s functionality shows a shift in focus from hardware to ecosystem-driven advantages .
3/ This launch comes at a critical time for Samsung, as it faces pressures from a declining semiconductor division and rising competition from Apple and Chinese manufacturers. The S25 Ultra’s AI-driven features and long-term update support reflect a strategic pivot to software and AI as differentiators in an increasingly competitive market. Financial Times, The Verge
Netflix is enjoying its year of hard work on a good strategy
Below are some ideas, which I have discussed in this newsletter over the years:
1/ Netflix’s record-breaking addition of 19 million subscribers in the last quarter demonstrates its dominance in the streaming market. Hits like the second season of Squid Game and live events such as the Tyson-Paul boxing match have drawn massive global audiences. With over 300 million total subscribers, Netflix continues to prove its unique ability to captivate viewers while capitalizing on new content formats. (Netflix uses a 'ladder strategy')
2/ The company’s strategic moves, such as raising subscription prices and expanding into live sports, reflect its focus on sustaining revenue growth. While CEO Ted Sarandos has expressed caution about costly sports rights deals, the success of recent live streams demonstrates Netflix’s potential to redefine its offerings. Meanwhile, its crackdown on password sharing and growing advertising business provide new revenue streams to support its ambitious programming investments. (Can Netflix be free?)
3/ What sets Netflix apart is its ability to maintain profitability in a competitive landscape dominated by tech giants like Disney and Amazon. By keeping costs stable and focusing on its core strengths, Netflix avoids the pitfalls of over-diversification. Its decision to discontinue reporting subscriber metrics signals a shift toward emphasizing profitability and long-term strategic growth over sheer user acquisition. LINK 1, LINK 2.
Customer Service in the Age of AI: from Transactional to Transformational
It starts small, with basic chatbots handling routine requests and apps offering self-service for the simplest tasks. Efficient, sure, but transactional. Then comes the upgrade: natural-language interactions and robotic process automation tackle slightly more complex journeys. Customers begin to notice the shift, things feel faster and smoother.
As AI matures, so does the experience. Human-like bots and AI agents step in, making even complex issues feel simple. The service no longer feels reactive, it anticipates needs, offering solutions before questions arise.
At its peak, AI redefines customer service entirely. Always on, always learning. A true assistant, understanding preferences, predicting needs, and solving problems before you knew they existed. This isn’t service anymore, it’s a relationship, designed for loyalty and delight.
The future of customer service isn’t a department. It’s a journey and with AI, it’s already happening.
Principle: Speed is the “secret sauce”
Things don’t really take time. The clock doesn’t lie, tasks are quick. What drags them out? Resistance. Hesitation. That inner dialogue convincing you there’s time to wait. But here’s the truth: “slow is fake.” It’s the illusion we wrap around fear and avoidance.
If urgency isn’t knocking on your door, create it. Push the tempo. Set a timer, cut distractions, and dive in. The faster you start, the faster you finish and the sooner you’re onto the next big thing.
Speed isn’t reckless; it’s clarity in action.
AI eats Social Media
AI is taking the wheel, guiding our digital lives. It’s not just about ranking posts anymore; it’s about predicting, generating, and shaping content tailored for you before you even know what you want.
And the user? Less director, more passenger. From clicks to scrolls, taps to swipes, autoplay is where the magic happens. The machine nudges you, curates your world, and keeps you locked in.
The question isn’t just what’s next. It’s how much control you’ll give up for convenience, immersion, and AI-curated perfection. Social media is no longer a tool, it’s becoming an ecosystem.
More about this trend in my book, chapter III.4: https://book.onstrategy.eu
Principle: Environment is everything
The environment is everything. It shapes your habits, defines your limits, and sets the standard for what you consider “enough.” If mediocrity is acceptable, you’ll sink into it. But put yourself where only excellence survives, and watch what happens.
The Greeks said it best: “A captain only shows during a storm.” Calm waters don’t demand greatness. Storms do. Seek the environments that challenge you, stretch you, and force you to rise. Move to the places where you flourish, not comfortably, but maximally. That’s where transformation lives.