Welcome back to Forests Over Trees, your weekly tech strategy newsletter. It’s time to zoom-out, connect dots, and (try to) predict the future.

Here’s the plan:

• Tech News Takes — super-short analysis and commentary

• Tool of the Week — tools you’ll find useful

• Strategy Tips — strategy nuggets (for business and life)

• F/T Shoutouts — sharing launches, tech events, and other reads

Netflix Delivers on Christmas

Plus: Hallucinations for good; Apple fighting Google's battles

⚡ Tech News Takes ⚡

Hallucination Silver Linings

• What’s up: GPT models often hallucinate, confidently saying things that aren’t true. But scientists have apparently benefitted from that. 2024 Nobel Prize winner David Baker pioneered several new protein structures over the last few decades, and he directly credits generative AI models with helping him achieve those breakthroughs. He’s discovered cancer treatments, viral disease mitigations, and has hundreds of other patents thanks to AI.

• So what: This is powerful. It’s one thing for tech leaders, AI model companies, and well-meaning newsletter writers to extoll the benefits of AI. But it’s entirely different to have research scientists doing the same — let alone for a flaw of current AI models (the hallucinations). It makes me think we might always carve out use cases for today’s version of GPTs, even after we develop superior, hallucination-free ones. The ability to think creatively, challenge assumptions, etc. will continue to be important for solving problems we don’t already know the answers to.

Netflix Delivers on Christmas

• What’s up: Netflix had a big Christmas. They successfully streamed 2 NFL games (and a Beyonce concert) with only a few minutes of audio issues, following a very glitchy fight between Jake Paul and Mike Tyson in November. They did not release precise metrics on how many people tuned in on Wednesday, but they were expecting ~35M, less than the ~50M who watched the Tyson-Paul fight.

• So what: Having fewer glitches is obviously a win for Netflix, and as I’ve said countless times I think live sports is a no-brainer for them. But the fact that a gimmick fight got bigger numbers than the NFL and Beyonce combined got me thinking… If you were a Netflix exec charged with growing live sports, wouldn’t you lean more into global sports (soccer, F1, fighting, tennis)? That way, you can boast about audience size. Maybe in the long-term, regional sports become important again (the same way regional/local TV shows are for streamers now), but that’s probably not the first move. I predict the next few big Netflix streams are for global sports.

Apple Wants to Help Defend Google from DOJ

• What’s up: Apple wants to join Google’s ongoing antitrust case about their search business. Apparently, Apple is worried that Google won’t properly defend their default browser agreements. Those agreements make Google the default search engine on Safari, in exchange for Apple getting a cut of Google’s ad revenue… (~$20B+ in 2022 according to Reuters). Apple’s concern is that because the DOJ has raised so many different issues, Google won’t fight the DOJ hard enough on the issue that affects Apple.

• So what: Two thoughts here. First, Apple might be too late to stave off bad outcomes, since the majority of the fact-finding is already done for Google’s case, and the DOJ has already issued a preliminary set of remedies (as we’ve covered before). Second, I can definitely understand Apple’s interest in having their rev share agreements stay in place — they’ve lost so many of the benefits of making the hardware and OS for mobile devices (now forced to open the App Store, open the NFC chip, etc.).

🛠️ Tool of the Week 🛠️

I love the holidays, because I get time to think. And most years, I start thinking about what’s coming next.

If you’re like me, these thoughts and ambitious plans about “what’s next” typically end up in a random journal – opened approximately once per year.

But this year, I’m doing it differently. I saw this habit tracking template on Notion, so I’m going to give it a shot.

If you’re in a planning mood and looking to super-charge your habits in 2025, let’s get a headstart!

You can grab it for free here.

🧭 Strategy Tips 🧭

Because I’m on holiday this week, I’m gifting you not 1 but 3 strategy stories from the archives!

Feel free to dig into whatever sparks your curiosity.

Memory is a Crappy Moat

If you use ChatGPT, you might have noticed it tells you when you run out of ‘memory’. If turned on, memory helps the LLM’s bring more context to every query you make. For users, it means better results! For OpenAI and the model companies, they’re hoping it means a moat — a way to stave off competition from other model companies, the cloud co’s selling them compute, etc.

But I think memory is a crappy moat! Read the full post here to learn why.

Hail No

Minneapolis got into a heated battle with the rideshare companies earlier this year. They passed a minimum wage law for drivers, and Uber+Lyft threatened to leave the city… which seems like an over-reaction until you consider the domino effect a minimum wage could have in other cities. Plus Uber+Lyft are just starting to reach profitability.

It’s not a good time to rock the boat! Read the full post here.

$2.3B for a Higher Hill

Earlier this year, Walmart bought Vizio. And that sounds like a nothing-burger, until you consider it as a diversification away from retail. Yes, you heard that right… Walart wants to diversify away from retail! Ad tech is a higher hill for Walmart (better margins, faster growing, etc.), and Vizio is a key piece of that ad tech strategy.

Read the full post here.