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LISBON—The CEO of the company that has become the web’s leading bouncer of bots is worried about much more than humans being outnumbered by AI on the web.
“The fact that agents are going to be the dominant users of the web going forward is the real trend that we’re going to have to watch,” Cloudflare CEO Matthew Prince said in a panel at the Web Summit conference here. “We’ve got to figure out what the business model is going to be.”
Cloudflare’s stats showed bot traffic outpacing human traffic for the first time this spring–far earlier than Prince had expected a year earlier. That means that traditional assumptions about audiences and how to monetize them look increasingly shaky.
“The business model of the web over the last 30 years was advertising, and agents don’t click on ads,” Prince told his onstage interviewer Nick Thompson, CEO of The Atlantic.
That publication, like many, uses Cloudflare to block bots and allow others; it’s also inked a content partnership deal with OpenAI. (PCMag’s parent firm Ziff Davis, meanwhile, is suing OpenAI, alleging copyright infringement.)
But it’s not only publishers who should be concerned about a rising tide of bots. “We have this massive potential tragedy of the commons problem,” Prince warned. He cited the example of someone in this city deciding to ask an AI agent to find somewhere to get lunch.
“It goes out, it scours 1,000 different restaurants all around Lisbon, looks at their menus, pulls down all their information, reads all their reviews,” he said. “That one restaurant gets the benefit, but 999 have experienced costs.” (Prince didn’t even bring up the worst-case scenario, where AI bots battle each other to book tables and shut out humans.)
“We’ve got to figure out some way in order to accommodate that,” he told Thompson. “It’s probably going to be some form of micropayments.”
People have been pointing to microtransactions as a solution to the web’s business-model problems for literally decades. Prince didn’t mention that, but did observe that not only would all the major AI companies have to agree on such a deal, but someone would need to build the infrastructure to support it.
“We would need to be able to support 10 million financial transactions per second,” Prince estimated, comparing that to the 80,000 transactions a second Visa handles during the holidays. “These are little transactions, fractions of pennies, every time they happen.”
Asked for evidence that AI firms would be open to this, Prince pointed to Google’s decision to start paying publishers for opening their content to its AI training bots after Cloudflare said it would change its site-screening defaults to block them. “I think that’s actually really encouraging,” Prince said. “That starts to set us up on a path of what may be a much healthier business model of the internet.”
But publishers participating in this program have also complained that payouts amount to as little as a tenth of a percent of their advertising revenue.
Prince also took some credit for getting Meta to back off imposing new terms of service that appeared to require business users of its services to allow Meta’s AI bots to scrape their content. “I found that just really kind of repugnant,” Prince said, recounting his feedback to Meta as “You’re just the new villain in this story, and we can block you too.”
‘Acting As a Bargaining Representative’
At that point, Thompson pointed out an apparent contradiction between Prince’s professed ideals and his increasing willingness to use Cloudflare’s enormous market power to set internet norms. “You are very anti-monopoly,” he said to Prince. “You also control a huge percent of the web’s traffic and you kind of act like Lee Kuan Yew here.”
Prince did not object to being compared with the productive-yet-authoritarian founding father of modern Singapore but did reject the idea that Cloudflare had that much of a moat. “It takes five minutes to sign up for Cloudflare; it takes 10 seconds to leave us,” he said, adding that Cloudflare is trying to increase the agency of content creators.
“We’re effectively acting as sort of a bargaining representative,” he said. “Hopefully there will be a time when they don’t need that.”
Prince also voiced concern for small businesses in a future dominated by agentic AI shopping, saying that radically rational AI agents that don’t care about human attachments to particular places and people would instead favor the biggest names. “Agents actually prefer whatever institutions have the most information online,” he said. The result: “The existing megacorporations win, and the startups lose in this space.”
It’s important to note that Prince is not an AI doomer. In a Monday night panel, he said the proper read on AI finding so many deep-seated vulnerabilities in existing systems is that “AI is the hero.” Saying “the internet is actually getting significantly safer,” he offered one of the most optimistic security forecasts I’ve ever heard: In a couple of years, this AI-boosted security research will take the internet to a point where “the bugs largely go away.”
But that might leave a great many economic flaws not only intact but also getting worse.
Disclosures: I’m moderating a panel at Web Summit, with the organizers covering lodging and airfare. I also use Cloudflare’s free bot-blocking service on my own site.
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Rob Pegoraro writes about interesting problems and possibilities in computers, gadgets, apps, services, telecom, and other things that beep or blink. He’s covered such developments as the evolution of the cell phone from 1G to 5G, the fall and rise of Apple, Google’s growth from obscure Yahoo rival to verb status, and the transformation of social media from CompuServe forums to Facebook’s billions of users. Pegoraro has met most of the founders of the internet and once received a single-word email reply from Steve Jobs.
Rob Pegoraro writes about interesting problems and possibilities in computers, gadgets, apps, services, telecom, and other things that beep or blink. He’s covered such developments as the evolution of the cell phone from 1G to 5G, the fall and rise of Apple, Google’s growth from obscure Yahoo rival to verb status, and the transformation of social media from CompuServe forums to Facebook’s billions of users. Pegoraro has met most of the founders of the internet and once received a single-word email reply from Steve Jobs.
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