Internet dating: will AI kill the web?

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1:14The Economist.

1:22Hello and welcome to The Intelligence from The Economist. I'm Rosie Bloor. And I'm Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world.

1:35In Austria's most recent election, the far-right party got the largest share of the votes. That's left the other parties in an unusual three-way coalition. Our correspondent meets the accidental chancellor. And, tired of all those overblown beach resorts in places like Florida and Spain? Good news, travelers. Glamorous new accommodations await you in North Korea. Our correspondent explains the motives behind a curious tourism push.

2:15But first...

2:22Remember that sound? The internet has become a bit more user-friendly since the days of dial-up. Now it's a constant presence in our pocket, an inescapable part of everyday life. Though connection speeds are faster than they once were, the way we navigate the internet has barely altered. Use a search engine to get where we want to go. But now something is rapidly changing how we interact with the web. Artificial intelligence. AI is really transforming the way that people find information on the web. It's bringing more knowledge to more people more quickly. Tom Wainwright is The Economist's media editor.

3:06But the concern is that at the same time, it may be killing the web. Tom, how precisely is AI actually changing the way most of us use the internet? Well, if you think back to a couple of years ago, the way that a typical person found information online was to go to a search engine, type in their query and they would be given a list of links to follow. But then ChatGPT arrived in 2022 and shortly after that search engines like Google began changing the way that they worked. And what happens now is that you type in your query and as well as or instead of being given that list of links you get given an AI generated summary which is in effect a kind of potted answer to your question.

3:46And so in many instances users of these search engines no longer need to click through to the websites which provided the original source material. The search engine or answer engine, as people now sometimes call them, just gives them the answer. And so in many cases, that's the end of their journey. In many ways, these answer engines are fantastic. They save people time, they give them a nice summary without them having to click through and read dozens of websites all by themselves, and users seem to really like it. But there is a problem because for the websites that provide that original source information, they're no longer getting as much human traffic, and that means they're no longer getting as much advertising revenue.

4:20And in the long run, that may mean that those websites cease to exist. So what does that mean for those websites? And by those websites, we mean publishers like The Economist and many others, right? Well, it's all kinds of publishers. Yeah, I mean, we're talking about content broadly. And this is a difficult one because, of course, as a news organisation, we have a dog in this fight. And we try not to let that influence what we say on it. But I want to make clear with this that we're not just talking about news publishers here. We're also talking about every kind of information resource that you can imagine on the web.

4:50To give some examples, we see that if you look at total web traffic over the last year, according to SimilarWeb, which is one data provider, it's fallen by about 15 % in the last 12 months. That's search traffic to websites overall. And if you drill down into different categories, you find that, for example, visits to science and education sites have gone down by about 10%. Search traffic to reference sites like Wikipedia overall has gone down by 15%. And traffic to health sites has gone down by more than 30%. So this isn't just a newspaper problem. This is a question about how people find content broadly on the internet.

5:24And how does that affect how those publishers make money? Traffic really is the kind of currency of the internet. You get people to come to your site and then you monetise those visitors by typically showing them ads or you might sell them subscriptions or sell them stuff. But either way, making them visit your website is the top of a funnel, if you like. And so as that type of traffic is closed off to some extent by these AI answer engines, content companies of all kinds have fewer opportunities to make money because their content is in effect kind of sucked out of their website and summarised very efficiently by these answer engines, which, however, mean that people, humans, no longer need to visit the source of that content.

6:05So how are big media companies or other publishers trying to get around that? Well, some of the bigger brands have been doing deals with the AI companies. There's a nice phrase by Robert Thompson, the head of News Corp, who talks about wooing and suing. The wooing is doing deals. They've done a deal with OpenAI. The suing speaks for itself. It's legal action against AI companies that take content without paying or without permission. And that works for the bigger brands. But for the smaller brands, it's much harder because if you're a tiny local newspaper, you just don't have the clout to go to Google and say, you know, we'd like a few million dollars.

6:40please. So this wooing and suing approach might work for some, but it's not going to work for everybody. I should add that The Economist's parent company hasn't yet taken a public position on whether it's going to licence our work. So you talk about these licensing deals, are they any good? Well, I mean, they sound big, but the question is really, is this enough to compensate for what's being lost? I think most publishers that I've spoken to are a bit sceptical. They like to talk about the value of these deals. In most cases, you're talking about millions of dollars a year, but as a share of what they are currently making from online advertising, in many cases, it's not that much.

7:14One case, for example, is Reddit, which has a licensing deal with Google, and it's been reported that that's worth$60 million a year. But that$60 million a year is not a huge amount when compared with the more than$20 billion that Reddit lost in market capitalization earlier this year when investors panicked about It's Google search traffic being bumpier than usual. So the money sounds good, but I think you have to compare it against what is potentially being lost. And when you do that, I think it looks a bit less good. And what about for the smaller companies that, as you say, aren't going to even be able to make those deals?

7:49Do they just have to suck it up? I think so far, yes, basically. There's not much they can do. They can block AI crawlers from crawling their content. But so what? They're not big enough to really force the companies to pay them. and if they block them from crawling them then it just means they get zero visibility in search which isn't going to help them. There are some solutions being proposed. Some people would like to introduce a system where AI crawlers get charged on a kind of pay-as-you-crawl basis. So the AI bot would visit a website and be told you can't read this unless you pay X amount of money and the amount of money would be roughly equivalent to the kind of sum that the site might have made in showing adverts to a human user in the past.

8:30Another startup that I spoke to has got a plan where it's looking at the answers that chatbots give and analysing those answers to try and determine where the information originally came from so that any revenue from the chatbot could then be shared in part with the sources that it came from. All of these things are quite hard to coordinate though because there's a bit of a collective action problem in that until everybody does this, the AI sites can just use other sites instead. And of course, the internet is pretty big. So if you're a small local newspaper saying, we want you to pay, you don't have very much market power.

9:02One possible solution to this comes from a very big internet security company called Cloudflare, which provides security infrastructure to about a fifth of the entire web. And they said recently that from now on, all of their new customers are going to get the option by default to block AI crawlers or ask them for money. So that could be the beginnings of a coordinated attempt to change the way that content is exchanged on the web. It's going to be hard, though, because the web is just so big and coordinating an effort across millions or hundreds of millions of sites is not an easy thing to do.

9:37So, Tom, what's your verdict? Does AI spell the death of the Internet? The death of the web has been declared many times before wrongly. People thought that smartphone apps would mean the death of the web, and it didn't. People thought that social media would mean the death of the web, and it didn't. So I'd be nervous about saying that this is definitely it. But I am really worried, actually, about what's happening, because something fundamental is changing here. The central economic fuel of the web is drying up, because for decades now, websites have operated on the basis that they get visitors and they monetize those visitors.

10:12And now that's just not happening anymore. We're seeing big examples of sites just getting big, big drops in human traffic. And as a result of that, big drops in their revenue. And if this continues, then the incentives to create content are going to dry up. And if that happens, then content itself is going to dry up. And I think in that instance, we're all in big trouble. Tom, fascinating, terrifying stuff. Thank you so much for talking to me. No problem. Thank you.

10:48Hey, everyone. It's Adam, host of Ted's podcast, Rethinking with Adam Grant. And this episode is powered by AT &T Business. When you're building a business, momentum is everything. There's nothing worse than hitting your stride only to have a spinning loading icon bring everything to a halt. When navigating competing priorities, reliability isn't a luxury. It's a foundation. AT &T Business is built to work so you can spend less time troubleshooting and more time focusing on what actually matters. Powered by AT &T Business. Built to work. Get today at business.att.com.

11:31Across Europe, support for hard right groups is surging.

11:40In May, Poland elected a president backed by the Law and Justice Party.

11:49In Germany in February, the AfD doubled its share of the vote. And in Austria last September, the Freedom Party got more votes than any other. After months of negotiation, it was kept from power by the country's first coalition of three centrist parties. That alliance is now headed by Chancellor Christian Stocker, head of the People's Party. I recently went to interview the Austrian Chancellor Christian Stocker in Vienna in his grand wood-panelled office on Ballhausplatz in the Imperial Hofburg. Wendelin von Bredow is our senior Germany correspondent. He was virtually unknown even in Austria before he became chancellor, so I was very interested to meet him.

12:34He has a very calm demeanour. His nickname is the Buddha of Ballhausplatz. And he was like that during the interview. His response is very precise, very calm. You sort of got the impression that nothing can really disturb his calm. I'm sure some things can, but that's the impression I got. And Wendelin, you said he was virtually unknown in Austria before he became chancellor. When did he become chancellor and how did that happen? He became chancellor about four months ago. after a period of turmoil in Austrian politics. Basically, what happened is that the hard right party got more votes than any other party at the federal elections last September.

13:13Subsequently, the three centrist parties tried to form a coalition. The talks failed and the previous chancellor, Karl Nehammer, resigned. Christian Schocker fully expected to also resign as general secretary of the party because he was also a very close ally of Karl Nehammer. but instead he was asked to lead talks with the hard-right party, the Freedom Party, to try to form a coalition between center-right and hard-right. These talks failed too and so the original talks were revived between the three center-parties. An agreement came together and Christian Stocker became chancellor, but he really is an accidental chancellor.

13:52I put that to him at the start of our interview.

14:02He told me a very amusing story of how he drove in jeans and a polo neck to the meeting of party leaders.

14:13And then he was told that he's the one who will lead coalition talks with the far-right leader, Herbert Kickl. and he had to hustle to get a suit to his office and change in order to talk to the press afterwards. We don't talk about Austria very much on the show, Wendelin. Just fill in some context for me. What are the main fault lines in Austrian politics? Indeed, Austria is a small country of around 10 million people in the middle of Middle Europe, so to speak, with a very proud history, you know, the Austro-Hungarian Empire. But it is, in the big scheme of things, not a very important country.

14:48But it has had an important hard right party for a long time now. And this party, the Freedom Party, has actually been in government four times and is in government in five of the nine states. So even more than in other European countries, the hard right plays a big political role in Austrian politics. And that's why we are so interested in Austria, because we think that Austria could be a blueprint for other European countries. And that is, of course, a slightly scary prospect with such a prominent hard-right party. When I spoke to him, you could really see how Stocker dislikes Kickl. He wanted to illustrate how he wasn't competent at all when he was interior minister in a previous government.

15:33Also Herbert Kickl hat in seiner Zeit als Innenminister bewiesen, dass er es nicht kann. He said he's unable to do it. He said he's actually not even competent apart from being a poisonous person. He wasn't quite so calm then. So how far is the far-right party in Austria reflective of that broader rise in far-right populism across Europe? Well, I would say the Freedom Party in Austria is almost a pioneer. I mean, they've been around for decades and it's played an important role in Austrian politics for decades, which is not the case in other European countries, certainly not in Germany, when now the hard-right AFD, the alternative for Germany, is also increasingly playing a big role in national politics.

16:16So in that sense, Austria was earlier than other European countries and others, Hungary, Germany, have followed. So there's a coalition now with Stoker at the helm. How's that actually going? So far, it's gone not badly. First of all, the three parties in power are quite different, but they managed so far to keep a united front. He seems to have a very competent team. His foreign minister, his justice minister, his economy minister and his finance minister all have a very good and sound reputation. And of course, it's not an easy time because Austria's public finances are in poor state. There's still the war in Ukraine that's influencing Austrian politics.

16:59And Austria is very much affected by Donald Trump's trade war and trade policies. So Christian Stöcker took over as chancellor as a very difficult moment for Austria. And you say that Austria's public finances are in disarray. How much will this political turmoil and the bringing together of three quite different parties affect the economy? Well, just when I was in Vienna, the European Union Commission opened an excessive budget deficit procedure against Austria. Austria is not alone. Many other European countries have that same close supervision by the EU because of the large budget deficits.

17:37But for Austria, it's particularly humiliating because they were always very proudly a frugal country like Germany and the Netherlands. So it does influence the current government a lot. First of all, the economy is stagnating. It's not doing well. And they'll have to do quite painful cuts in public expenditure. In fact, they've already started doing them. And that's never very popular because things like the climate bonus, which was a subsidy for climate policies, has been cut. There's going to be cuts in pension payments. Fewer people are going to be allowed to retire early. All these things are not very popular.

18:12And that will, of course, affect the standing of the three-party government. As you say, Wendelin, a three-way coalition is notoriously tricky to pull off. And particularly when you want to push through some really unpopular moves. How likely is it that they will be successful and persuade people not to vote for the far-right populists next time? It's quite hard to make that prediction, but they are driven by the spectre of Herbert Kickl, the leader of the far-right party in the chancellery. That's the one thing they hope to avoid, is the glue that keeps these three very disparate parties together.

18:50It's a powerful driver, but of course it's still hard to predict whether they will manage to stay together until 2029. Bendolyn, thank you so much for talking to me. It's always a pleasure to talk to your resume.

19:17Less than a decade ago, the North Koreans were using the Kalma Peninsula as a site to test weaponry. Andrew Knox is a news editor for The Economist. In the time since then, it's been completely transformed.

19:35In late June, they announced the opening of this enormous new resort there right on the beach. It claims to have five kilometers of pristine beaches, 54 hotels, shopping centers, cinemas, you know, all those kinds of things that you might expect in any resort anywhere in the world. So, of course, being North Korean, wanting to make a big show of this for the papers and for their propaganda outlets, They opened in this enormous celebration, dancing, fireworks, the whole nine yards. Kim Jong-un, the country's dictator, was, of course, in attendance and looking pretty happy. He sat there with his wife and his daughter, watching people go down water slides and looking out over the sea.

20:22So, hang on, pardon my confusion. Is there, like, lots of demand for getaways in North Korea? What, are you saying you're not anxious to go, Jason? Convince me. Carry on.

21:00that 350 ,000 Chinese tourists had come in that year. And that's a tidy earner for the regime. That said, the pandemic killed it all. No one could go in or out basically for years and years. And it was only really in February of 2024 that the first tourists were allowed to come back in. And so this weapons testing site come resort is a way to get things back to pre-COVID levels, to beyond pre-COVID levels? Well, trying to judge the intentions of the North Korean regime is a bit of a fool's game. You know, you can read what they say. You can try and work out what makes most sense as an explanation for their actions.