View / The AI age is missing its phone company

“Content is king,” Sumner Redstone said as technological shifts upended the media industry in the 1980s. That was the principle ho-hum distributors followed as they joined up with the creative engines of their industries, hoping to capture their glitz, IP, and stock-price multiples.

Now, the pendulum is swinging back. In a world drowning in content, the value is increasingly in the pipes that deliver it to eyeballs. Verizon and AT&T came to that realization after their failed Hollywood and Madison Avenue reinventions. Comcast got there this week, announcing it’s cutting loose NBC and Sky News and turning itself back into the broadband company it was before it began its media makeover in 2009.

There are parallels closer to my own beat on Wall Street. After regulators cracked down on banks steering their customers (distribution) into their in-house funds (content), the industry shifted to an “open architecture” model that largely divorced the two. They tilted so far toward neutrality that I’ve wondered over the years why banks even own asset managers anymore. No private-equity firm has bothered to buy a retail brokerage to vertically integrate their push onto Main Street. They are the content, not the pipes. Oil drillers, too, have sold off their energy marketing and gas station networks.

What does this all mean for AI? The LLMs are the content. (The raw materials, of course, were reconstituted from publishers, and all of us, but never mind that for the moment.) OpenAI, Google, and Anthropic also want to build the pipes — to own consumer-facing apps and developer-facing APIs that deliver that content to users.

The AI revolution is so far missing its phone company, a distribution network that knows what it is and doesn’t try to be cool.

It might work. A billion people use ChatGPT directly every month. Google is integrating Gemini into its browser and powering Apple’s Siri intelligence. Another possibility is that a big existing software company — Salesforce or Microsoft, perhaps — becomes an open highway for any and all AI models. A third is that AI doesn’t actually need an unsexy, uncreative distribution network. Smartphone voice interfaces can work, and whatever AI-native hardware Sam Altman and Jony Ive are building may provide a new channel that obviates the need for a pure-play distributor.

But that would make AI the rare industry that doesn’t grapple with the tension between content, distribution, and the questionable value of owning both under the same roof.