AI Superpowers for Frontend Developers, with Vercel Founder/CEO Guillermo Rauch

0:05So much of the web runs on Vercel, and now it'll run on Vercel and AI. Ilad and I are super excited to welcome Guillermo Rauch, the founder and CEO of Vercel. It's one of the most popular developer front-end framework companies and is widely used by Adobe, Okta, eBay, and others. We unpack the company's AI strategy, what's next for the web, and more. Guillermo, welcome to NoPriors. Thank you. I'm excited to be here. Just for people who are not super familiar with Vercel, can you give us a quick explanation of the company? Yeah, you described it well. We're basically a web infrastructure company.

0:40We provide the frameworks, tools, infrastructure, and workflows for companies to deploy the most dynamic and ambitious websites on the internet. So we power anything from the technology behind ChatGPT, in fact, is powered by Next.js, our open source framework, to websites like UnderArmor.com or Nintendo, where we provide the infrastructure to serve all their traffic and help them iterate on their web presence. And what's the sort of founding story of this? Technically, I started it at the very, very end of 2015. But I kind of settled on the idea and launched some of my first prototypes at the beginning of 2016.

1:19Yeah, it's hard to imagine even it not existing now. At the time, what drove your belief that this was a different defensible product than the incumbent clouds? So there's an interesting duality in me. On one hand, I'm basically a missionary of the web. I want the web to win. I want open platforms to win. I want developers to win. On the other hand, I really love Apple and companies that invest a lot in design and integration and making things really easy. So in many ways, the inspiration was, can we create a developer platform that does for the cloud what maybe the iPhone did or the MacBook did for personal computing?

2:02And at the time, I had just sold my company to Automatic, the company behind the WordPress. So I had this idea in my mind of just making it really, really easy for developers to deploy an idea to the global web and to start focusing on the front end, which is sort of my strength. I've been a front end engineer for the vast majority of my life. There's always been sort of this, you know, almost like disdain in engineering for front end. It's like the last thing you worry about. but we've kind of turned that upside down and we've made the case that front-end is the most important thing that your company has because that's where you meet your customer that's where you can accelerate your website to drive more conversion more signups more sales so i wanted to also create a company that focused on this last mile of end user experience and kind of work backwards into you know all the integrations and backends that you need to bring in to to create a full stack application.

2:58And that's what Vercel has become, basically. To me, it's a portal into the web and into a new way of building software. Speaking of working backwards, then, when did you begin to think about AI and get Vercel into it? So I've actually been a fan of AI for many, many years. As an angel investor, I was one of the early investors in companies like Scale AI. To me, AI is just another important step, huge step, of course, but another important step in this idea of automating all the parts that we don't want to deal with when we're in the pursuit of a creative endeavor. And it's very true to the spirit of Vercel that incorporating any backend, any new technology into your site, especially into dynamic web applications like the ones we power, should be really, really easy.

3:48And the other insight for me was it's clear that a lot of these AI foundation models almost feel like cloud 2.0 where, you know, tremendous SaaS businesses have been built on top of companies like AWS. Snowflake, I think you all had their CEO as a guest recently. Snowflake is a good example of you maybe you don't need to reinvent all of the infrastructure. You can create a great cloud native company. My new insight is there's going to be a lot of great AI native companies that are built on top of this new infrastructure, let's call it like Cloud 2.0, which is this foundation models. These are the new backends that are going to power the most exciting front-end engineering applications.

4:33And to that end, we created this Vercel AI SDK that is now powering a ton of different startups. We just heard about a bunch of awesome companies that joined their AI accelerator that are, a lot of them are being powered by this SDK. It's basically the easiest way to create an AI app without having to reinvent the backend wheel, right? Like you can connect to OpenAI, you can connect to Hugging Face, Replicate. So we're really focused on that idea of ease of integration and really the easiest way to put AI into the hands of users and creating actually valuable products. I always advise the team and folks that I work with, I'm not for random acts of AI, like just like, you know, checking a box, but creating really useful products.

5:18And I'm a big believer that that last mile of integration can be where a lot of the value accrues. Can you talk a bit more about what sort of products Vercel offers on the AI side? I know you have the AI SDK, which is a development kit for AIOps. You have Chat and Prompt Playground, which has performance of various LLMs. It'd be great to just hear more about the different tools you have and what companies have started using them and how. So I'll also go into some crucial infrastructure advantages that Vercel brings to the world. One is we have this product called Edge Functions. We allow you to run compute as close as possible to the user.

5:51A lot of these AI applications require this idea of streaming content to the end user. So when you type in something, if you just sit there waiting for the server to respond, this is quite a new thing on the web, right? Like most e-commerce websites, most backends are sort of optimized for responding within 100 milliseconds. seconds, AIs can sometimes take like 15, 20 seconds to actually, you know, fully bake a thought. So a lot of our infrastructure in this Edge Functions product is sort of empowering these like long sessions of dynamic streaming of responses from as close as possible to the visitor.

6:29So the edge of the network. And this has actually played a crucial role in sort of making apps that integrate with AI, not just really easily, but that the performance of them is really good. The user experience feels really good. So if you go to the RAI SDK, we actually show you this is what the application would feel if you just use a traditional back and then it's blocking. This is what it feels like when you're leveraging these streaming technologies. So the SDK currently also plugs into all these sort of text-oriented LLMs. But we're planning to add voice, audio, image generation sort of to bring more tools into the toolkit of front-end engineers.

7:09In the Vercel template marketplace, we actually have a lot of different apps. Some of them that have already even gone viral, like RoomGPT, where you can sort of redesign your bedroom or your living room by using an image generation model. So that shows you how you can take an open source model. I believe in that case, it's hosted by replicate.com. And you can sort of create an application with a turnkey subscription model, sort of log in and sign up and deploy it in basically seconds. So a lot of what we're doing is just putting AI into the hands of as many developers as we can. Where do you think this all heads?

7:48So if you think ahead on the roadmap or strategies or anything else you can share in terms of future products or future things that you're going to be releasing. I'm a big believer that folks have still underexplored the integration side and just creating new AI native products for entrepreneurs or startups that are listening in. I do believe that you don't have to train or fine tune a new model in order to create a legitimately useful product. I've been just looking at startups like Jenny.ai where they went from a million in ARR to 1.5 million ARR over the past two months on creating a very specialized product to assist researchers in writing research papers.

8:30And so I think a lot of what you're doing there is creating the right product from the point of view of what is this problem that's already existed? What would it look like to solve it if now I have AI as sort of my input in the design space? And I think that's a radically different way of thinking compared to I'm going to add AI to an existing product. I'm going to add AI to a word processor. So I think there are a lot of exciting avenues to explore in that direction. A lot of the productivity tools that I use on a day-to-day basis could certainly benefit from being rethought from the ground up.

9:05And our perspective at Vercel is, start with the front end, start with the AI SDK, which saves you a ton of time in the AI integration side. One of the big things that we believe at Vercel is that we're going to build the best possible products if we're customer zero of our own products. So we build the entirety of Vercel.com using the Vercel platform itself. It pushes us to make a better Next.js. It pushes us to make better infrastructure. It pushes us to make the builds of our websites faster because we've dramatically increased our engineering headcount and we want to optimize for their productivity and so on.

9:42So on the AI side, we want to do the same thing. We're starting to think about if you had the ability to automate a lot of the work that front end engineers in particular do on a day to day basis. You know, creating forms, creating UIs, creating layouts. A lot of this is almost statistical in nature. The expectation of a good user interface is that it has to be familiar. It can't be completely pursue your own journey every time you sit down to create a new frontend. So we're basically dogfooting our own AI SDK to think about the next frontier of automation and generative AI, but apply to the domain that we know really well, which is UI and frontend engineering.

10:26I know that you're a very beloved company in terms of developer adoption. And, you know, I think it's one of the most popular developer-centric companies in the world right now. What do you think is lacking from an AI developer tooling perspective more generally? There's a layer of instrumentation that I think is really critical. Typically, when you look at the successful sort of monitoring and observability companies of the Cloud 1.0, I'm going to use like Cloud 1.0 and like Cloud 2.0 to denote the new AI native wave that we're seeing. If you look at cloud right now, a lot of the best products in the observability space were born out of, we understand what frameworks and primitives you're using.

11:07We're going to integrate extremely well with them. I remember the first time I used Datadog, I was blown away because the onboarding process was so well-tuned to, hey, let's not let you move on from the onboarding page until you've sent us a data point. And instead of giving me like, not so familiar way of sending them data, they sort of enumerated all their integrations. I actually just checked out Zapier onboarding from scratch. I'm just an onboarding diehard. Zapier is one of our customers. They run all of Zapier.com and Vercel. And they have the same thing. It's just so awesome. Like you sign up and then they take you to like, let's tell us what software you work with.

11:47Tell us what integrations you work with. And it wouldn't even let me click on the Zapier logo. I was so deep in the funnel. It was beautiful. So Datadog does the same thing for sort of, oh, here's Kubernetes, here's Next.js, here's all the things that you already know. I don't think that that's fully landed for AI and the new sort of topology is different. The frameworks that you use are different. Of course, there's the AI SDK, there's LangChange.js, there's a ton of new frameworks. And the things that you're monitoring are different as well. Yeah, there's a few different companies I feel that are starting to work in this area, you know, tackling different pieces of what you're saying.

12:24And to your point, it really feels like a very active area of sort of developer tooling, right, that's being developed right now. So, yeah, it's really cool. I definitely think the overall, like, let's say monitoring, testing, observability, like feedback collection space is really nascent but important. Really exciting. I think in like cloud 1.0, it's almost like a nice, of course, you need observability to ship and maintain and evolve a production grade application. It's like letting you provide a great quality of service. But in the AI realm, it's just so mandatory. Like your V0.1 already needs that critical feedback loop.

13:02Whereas I think maybe some engineers that are moving fast in the early days of a startup may be more lenient with how much they observe their endpoints and so on. So the other hot take that I have is I think a lot of the early frameworks that we're seeing, the more opinionated frameworks that we're seeing, they're probably going to have to evolve a lot. And I think that we're probably going to see a second generation of frameworks that come out of actually building and deploying AI at production scale. I think a lot of the DX tools for AI that have emerged so far are more rooted in, I have to get the job done.

13:42I don't know if it's the best way yet. We haven't really run the application in prod for that long. My insight there is, there's probably going to be significant evolution in the frameworks for AI space. And I'm not talking about sort of the training tools that PyTorch of the obviously those are very well baked. I'm talking about sort of the last mile, everything that has to do with agents, everything that has to do with indexing and retrieval and more of the novel integrations of AI applications. If you think ahead in terms of where the web is heading, at least a subset of the interactions on the web are probably going to become agent-based, right?

14:24So you'll have an agent that represents you, an agent that represents a company or a product, an agent that represents the government, and you'll basically have your agent go and act on your behalf and I'll just interact programmatically through APIs or other means. What impact does that have for Vercel and does that even matter? I think it matters already tremendously. So one of the key investments that we're making is in security products. So when GPT-3 came out and folks were sort of dying to integrate it and launch it, OpenAI is by far the most popular backend. We have sort of aggregated anonymized telemetry and what are the backends that our server functions are talking to and OpenAI is sort of biggest.

15:04What happened was a bunch of folks published, you know, whether it's chat GPT clones or demos or prototypes and whatever. And then sort of the abuse began of folks that wanted free tokens, so to speak, and started like running proxies at scale to basically just, it's almost like extracting intelligence. Like I want free intelligence. I'm just going to write, instead of writing a scraper, let's call it Scraper 2.0, I run a bot that tries to get free GPT-4, basically. So this is still a huge problem, by the way. A lot of products have integrated AI in such a generic way that they've opened up their token.

15:48Even if they have authentication in front, they've essentially opened up this source of intelligence to the entire internet, including countries in which this AI has already been banned. or companies where the use of AI has been banned. So there's definitely a security challenge there that we're giving tools to developers to address, whether it's integrated tools to facilitate rate limiting, bot detection, and all kinds of technologies also for reducing the cost of deploying these AIs, like integrated caching of a lot of the open AI responses that are cacheable and so on. So I think on one hand, we already have that issue already at internet scale around how do you protect your own investment in AI?

16:35How do you also potentially protect your own unique IP from adversaries and so on? The other one, I think, is the one you're calling out that is related to the bot detection mitigation problem, which is how do I actually have a good bot versus a bad bot? And how does a website owner at scale sort of have an understanding of what is the right ratio? Already, we're seeing that a lot of these AI companies are very strict in blocking any kind of bot activity because of the threat of abuse. So I think we're going to have to continue to find more sophisticated, it's almost like the AI and the counter AI, we're going to need to deploy more and better AI to sort of detect the bad bots and keep them at bay.

17:23While also allowing you to your point, the authenticated good ones that are going to become your agents that represent you in your ability to crawl the web. The other challenge that emerges as well is this idea of like, is my content AI generated content or not? And what does that mean for SEO in the future? The traditional conception of SEO is I'm going to optimize keywords for Google. And I'm going to make my site really performant so that Google crawls it and then boost my results based on the signals of performance that they've aggregated from visiting my website in the past. there's a world where there is an intermediary to your content that is no longer Google, right?

18:07And obviously this world already exists with GPT-4, but there's a cut-of-date problem and so on. But now we have folks like Perplexity, where they're basically real-time. So the question that will emerge is, how do I get SEO right for these retrieval engines? Do you feel like you have customers that are already working for or planning for this or thinking about how to handle it, especially if they're more content oriented companies? Yeah. So on the bot mitigation and abuse prevention thing, every single customer that's deployed AI at scale, at any scale, a product that actually works has already faced this challenge.

18:49And of course, we're continuing sort of, in some cases, you're playing cat and mouse. In some cases, you're just advising the customer on how to implement better protections and better tools and finding that balance of, you know, how do I actually deliver a good experience for everybody while also protecting my business. On the SEO side, I think mostly I'm just hearing a lot of questions from people, right? Like, is Google still king? Are the rules of SEO still the ones that apply to me? So I think those are the main ones. But again, my perception is there's a lot more people entering the crawling game and doing this retrieval process.

19:25Whereas before it felt like you had to delegate all of that to like Bing or the Google search API. And I think creating protocols to negotiate content and to make it more accessible and more distributable, it really depends on your business model to a great extent, right? For us, I would love if every single AI gets the most recent Next.js APIs to be correct, which is not the case right now. If you ask ChatGPT how to solve a problem with Next.js, it tells you the solution for 2020. And I would love for that to be the solution for 2023. So please go and help yourself to our docs. I can give you whatever format you want.

20:06But for other companies, it's going to be a challenge, right? Because they're expecting a different type of content negotiation. It seems like that's another place where tooling can become really valuable in terms of the ability to understand whether content that's provided in a corpus is, you know, falls under certain copyright laws or has other issues around it, or there may be other sort of tools that we increasingly will see from content owners or for content owners in terms of how you actually deal with this on the web. And, you know, we've already seen some early days versions of that around image gen and some of the image generation models and people not wanting certain content included in that.

20:37Like Getty Images, I think famously pulled a bunch of data specifically to avoid this sort of issue or ask people to pull that data. I wouldn't be surprised if the APIs that we're used to today, which are basically, here's your stream of words that answer the prompt, become a duplex stream of the content and the citations, right? Because a lot of products actually require it. I might be, and in the future, legally required to log, you know, where that content that I gave to a certain user came from. So I may want to give you a little UI component to explore the citations. maybe you want to hover a part of the text to understand where it came from or simply you just want to like throw it into a log file for future reference like what are the sources that your users keep coming back to and that are worth exploring more yeah it makes a lot of sense I think this idea that you were talking about of more people getting into the crawling game is a really interesting one I think we all have some exposure to like search tech and search companies but it both seems to me like really challenging that agents, we're going to have more agents.

21:49They're going to need access to the web or many of them to be really useful, right? Google is not going to give you their index. Bing is going to be expensive and like not be up to par on some things, right? And you can also just like imagine technically an index that's just better for an agent to interface with, right? If I'm not trying to serve people, I'm trying to serve an agent. But I guess from recent experience, and you guys would also know this, It's like to have an index, you need ranking and coverage in the web is very, very big, right? So fresh coverage of a trillion URLs is a very expensive value prop.

22:21And I would love to see somebody with like smart ideas about if there is some way to go about this problem that doesn't require like full coverage. But maybe some team needs to figure out how to get how to get there. One idea is that you delegate the full coverage to the initial sort of pre-training of the large models, and then you complement it with your own up-to-date indexing of the sources that are relevant to your domain-specific queries. So I also use a product called findphind.com, also for a sale customer, where what they do is they really focus on high-quality developer results. So when I have a very tactical question about a vendor, it's given me amazing results.

23:06And I think there's a version of this where like case text or sort of like any search engine for a particular knowledge worker type will have that, you know, need for like the specific crawling. And that makes the web a lot smaller. Right. Another insight that I'd like to share with folks is there's this data set that Google sort of open source is called Crux Chrome User Experience Report. And it's basically all their anonymized telemetry of the highest traffic websites on the Internet. And it doesn't tell you exactly what the rank is. So it tells you by cohort. For example, in the top 1000, you already have ChatGPT and Character.ai.

23:49They're in the top 1 ,000 most trafficked websites of the public internet, so to speak. And you can actually notice this crazy power law distribution where you have the top 1 ,000 websites of the internet amounting to basically like 50 % of page views. Especially on mobile is even more slanted than on desktop. So there's an argument for you can create crawlers that target, you know, even if you target the top 10 ,000, you've covered things that most people actually use. Now, in that top 10 ,000, you also have dark matter of inaccessible internet. But the point stands that you can do a lot of crawling of sort of the open access internet.

24:37And going back to like the changes that could happen to SEO, you also have this opposite problem of like a lot of things that used to be crawlable are no longer crawlable. So you have to pay some huge API penalty. Where else do you think web architecture changes overall, given these changes in AI? Are there other things that you're really thinking about deeply at Versal relative to all these shifts? Yeah, there's a huge push for dynamic and away from static in sort of the previous buzzword of Jamstack architectures. It's very clear that content already changed very rapidly. You had your CMS and you had a bunch of people working on your CMS and they pushed content changes.

25:18And what really didn't work for the web is static generation. Like every time your content changes, we'll rebuild the entire site. And that's what's really created a kind of weird experience for a lot of folks on the web, where in order to actually get a change live at scale in 2023, it might take you an hour. Because there's all these layers of caching. There's this huge build process. There's a lot of static site generation. So a lot of folks, and behind Next.js is a lot of distraction of moving from a static to a dynamic architecture. But now I'm seeing, for example, all the headless CMS vendors add AI capabilities.

25:59Of course, you also have the content hubs or content collaboration platforms like Notion also add AI. So if the rate of content change in production continues to increase, the need for more dynamic infrastructure and architectures continues to increase. The other one is just generally speaking, we're all going to have more access to AI and therefore we're going to increase the amount of personalization on the web. So I think we're going to continue to see more of a web that's just for you and also delivered very quickly. And then is there anything else you'd predict in terms of changes to front-end or AI UI that you think is going to come in the very near term?

26:42Yeah, there's a really weird meme in front-end, which is that front-end engineers change their tools every weekend or every week based on what framework comes out in Hacker News. Funny enough, the reality has been the opposite. If you actually look at what are the Fortune 5000 doing? What's happening at scale? When we crawl that Google Chrome report of like what are the technologies that are actually being used. Frameworks like React, Svelte, and Vue very clearly seem here to stay, especially React has sort of dominated at the top of the web. So I actually expect to not see a ton of change there and the innovation to switch to like what are the AI tools that can actually generate that code.

27:29A lot of what makes MidJourney so good at what it does is that almost every prompt yields something that's a statistically pleasant piece of artwork to look at. And I think the way that we built for the web will sort of go much more in that direction. You don't start with the empty canvas every single time. But also crucially, so when I say don't start with just a blank page and rebuild every element and place every element like you're a caveman, I think a lot of folks already don't do that. And they say, well, I use templates, right? Now you have a phenomenon that happens a lot in Hacker News and startups, which is every startup has the same template.