Apple’s App Store vs AI Growth, per Sharp Tech with Ben Thompson

Sharp Tech with Ben Thompson opens with fresh developments around Apple’s App Store and quickly pivots to why they now feel almost irrelevant. Host Ben Thompson jokes that he “fell asleep” at the topic, using that boredom as his starting point rather than the details of new rules and settlements.

According to Thompson, the bigger story is how the tech narrative has shifted from slicing a stagnant pie to chasing new growth in AI. Years ago, he was deeply invested in App Store policy, regulatory hearings, and antitrust theory, even making them one of his signature “pet obsessions.” But he says that era culminated in burnout: not from covering tech itself, but from endlessly following regulation, congressional posturing, and giant legal documents.

Now, he argues, AI has changed the conversation. Instead of arguing over commissions and consent language, investors and builders are focused on entirely new products, data centers, and opportunities. Co‑host Andrew Sharp notes that even he struggles to “muster the same passion” for Apple’s latest shifts, because they look small next to the upheaval and promise created by AI.

Thompson’s central thesis is that the intensity of App Store and ATT debates was a symptom of stagnation in tech, not a core driver of value. When services revenue was surging during the COVID era and everyone was locked at home, Apple’s tightening of App Store rules and 30% fees became a political and economic focal point.

He argues that when an industry is growing, many structural problems still exist but matter less, because “the pie is getting larger” and everyone feels upside. When growth slows or feels absent, attention shifts to how to slice the existing pie, and zero‑sum fights over commissions, privacy prompts, and distribution terms dominate.

In that frame, Thompson sees today’s AI wave as resetting priorities. Issues like Apple blocking self‑updating AI‑powered development tools, or limiting app‑like functionality built via services such as Replit, still bother him. But because AI represents a large new frontier, he believes these frictions haven’t risen to the same level of urgency, even though Apple is, in his view, “choking something of the future” by insisting everything pass through the App Store.

The episode anchors on a concrete case: Germany’s competition authority concluding a four‑year investigation into Apple’s App Tracking Transparency (ATT). Thompson has long argued that ATT was “hilariously anti‑competitive,” in a classic, easy‑to‑prove way unlike more novel “aggregator” cases.

According to him, Apple forced third‑party apps to use a scary, high‑friction consent prompt for tracking, while reserving softer, friendlier language for its own equivalent tracking. He frames this as Apple changing the rules after the fact in its own favor, which he believes is a straightforward antitrust problem in existing U.S. doctrine.

Germany’s outcome — requiring Apple to use the same wording for its own services and third‑party apps — is, in Thompson’s view, a “good outcome” and an example of effective regulation, even if late. He notes with some disbelief that the article where he first flagged the German investigation was written four years earlier. Over that span, he says, the digital advertising ecosystem has already been “remade to some extent” around ATT, underscoring how slowly formal remedies arrive relative to tech shifts.

Even as he criticizes specific Apple behaviors, Thompson insists that the App Store itself was “a good thing.” He credits Apple with creating an entire smartphone app ecosystem that laid the groundwork for billions or trillions of dollars of value and consumer surplus. In his telling, the same structure that later enabled overreach also enabled massive innovation and economic growth.

He extends this to political economy: when policymakers focus too early on “the backside” — the bad behaviors of platforms — they risk killing the “front‑end” upside that justified the platform in the first place. Thompson would rather live in a world where Apple captured huge upside, misbehaved in some areas, and was cleaned up late, than in a world where regulators crippled the model before the value was created.

This perspective tempers his praise of the EU and German regulators. He sympathizes with frustration that it took until 2026 to resolve an ATT wording issue launched in 2022, and he understands why EU policymakers pushed their AI Act early after feeling they were late on the Digital Markets Act. But, he argues, slow action partly reflects how valuable and broadly beneficial the App Store actually was.

Beyond Apple, the hosts briefly compare the fading intensity of U.S. TikTok debates to the overshadowing rise of AI. Andrew Sharp recalls spending countless hours podcasting about whether TikTok should be banned or forced to divest, and says he still dislikes how the Trump administration handled it, but now finds it hard to care as much.

Thompson, however, suggests the TikTok question “actually matters more than ever” in light of AI and AI data centers. He raises the possibility that China could be subtly influencing content via TikTok, arguing that Chinese authorities would be “derelict” if they weren’t trying to tilt the information environment. Yet even this, he notes, attracts less sustained attention compared with AI infrastructure and competition.

Looking forward, Thompson flags several areas to watch: how Apple treats AI‑assisted app creation tools, whether iPhone users can safely run more custom code without going through the App Store, and how EU AI regulation, including watermarking rules, affects innovation in a region he describes as relatively weak in AI. He also nods to proposals where European firms focus on operating data centers for Chinese AI models, illustrating how geopolitical and infrastructural choke points could reshape tech economics beyond today’s App Store drama.