Is Spotify Slop Now?
The Weekend Leverage, June 7th
In the last 8 days, I’ve flown from Boston to LA to NYC to Utah, all in the pursuit of an answer to this question: what is scarce in a world of AI abundance?
In LA, I went to the creator conference Press Publish. I met everyone from a dude who makes aesthetic smoothies for 1.8 million followers to a channel called Jomboy that is so influential in baseball that the MLB invested in it. Despite the billion-plus fans those 500-odd creators represented, there wasn’t a single person I met who said “we got this.” We’re all in a constant battle to get our work surfaced to our fans. Add in the changing cost structures with AI, and at the event you get a bunch of overwhelmed people trying to make it in a very hard business.
In NYC, I went to throw The Leverage’s first live event. (Thank you to all of you who came and gave of your scarce time.) The rest of the week was spent listening to the stressed venting of founders with thousands of employees or the oozing, schmoozing confidence of VCs writing billion-dollar-checks. Because I’m an outsider, just a “dude who aggressively blogs,” as someone put it this week, I used to view my distance from these types of folks as a competitive advantage. And in some ways it is! My writing has never been subject to the groupthink of NYC or SF. Still, in my 4 days in NYC, I got more quality sources and meetings than I had in the last 6 months of attempting the same work remotely. A handshake with the powerful opens up an incredible amount of opportunity.
Then as I came to Utah to pick up my kid. When my daughter saw me, she snuggled into my neck, and laughed and laughed and laughed as I tossed her in the air. Here, in a quiet town nestled among the red rocks, I felt like I had found the scarcest beauty in the world, that of her smile.
My trips have shown me that the scarce thing in a world of saturated screens is the beauty and value of human connection. So naturally, the inner capitalist in me wondered, is that actually a business? More on that in a sec. But first, this edition of The Weekend Leverage is brought to you by HighLevel.
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MY RESEARCH
We are the minority of the internet now. This week Cloudflare announced that bot traffic passed human traffic for the first time in the web’s history. 57.4% bots to 42.6% humans. Nearly every economic assumption of the internet was built on the assumption of human users. For example, one reader built a Claude Skill of me and now uses it every day to complete their job. I have some thoughts on what this new internet does to everyone, and where the money goes next. Read here.
WHAT MATTERED THIS WEEK?
THE TOKENPOCALYPSE
Would you bet $10M on your own product? Cognition, an AI coding company, announced that if its product delivers less engineering value than an enterprise customer is paying for, Cognition will fund that customer’s usage until it does, up to $10M. I sat down with several AI-native company founders selling into the enterprise at NYC Tech Week, and every one of them complained to me that their customers have cost concerns around tokens. And because it is incredibly challenging to measure developer productivity, customers were worried.
This effort from Cognition is obviously in response to that feeling. To measure productivity, they built an estimator agent that reviews every completed Devin session, classifies whether it produced useful output, and then estimates how many hours a human engineer would have needed to produce the same work. Near the end of the annual contract, those hours get converted to dollars and measured against what the customer actually spent. Fall short, and you get credits. Cognition is essentially writing a performance warranty on its own product and self-insuring the downside. Interestingly, they didn’t actually publish what percentage of their customers would qualify for this policy today, so I have to assume that it is incredibly conservative, and that this is at least somewhat a marketing salve versus a true insurance policy.
The Leverage morally supports the existence of incredibly boring industries, and insurance is one our favorites. The mark of a healthy, stable market is always multi-layered insurance products because that means the risk is well enough understood to underwrite. Just in April I wrote an entire edition on the very topic of AI insurance policies! That Cognition had to underwrite Cognition’s product sounds bullish at first (they are putting their own money on the line) but it is actually bearish (this is so unproven/unstable that no one else was willing to take that risk on).
The reason this matters beyond Cognition is that the whole AI industry is going to have to contend with the collapse of the cheap token narrative. I expect that the rest of the coding agents will match this offer within 9 months. Interestingly, because both Anthropic and OpenAI have general-purpose-products versus a use-case-specific-application, I don’t think they’ll be able to offer the same insurance to their customers. Another point for the GPT-wrapper team.
BIG RUSSIA
Washington wants to own the AI labs. Senior Trump officials held early talks with the major AI companies about the government taking equity stakes, per a NOTUS scoop on Thursday that the Journal picked up. Bernie Sanders wants to go further and seize 50% outright. I told you on March 1st that “politics is business strategy now.” This is what that looks like 14 weeks later.
We’ve done this before with Intel. In August 2025 the administration converted $8.9 billion of already-promised CHIPS Act money into a 9.9% stake. The President of the United States is now posting share-price updates like a crypto-bro in a Discord pumping his own bags. That is the offer on the table for the labs. Surrender a slice of equity, get anointed, then watch the most powerful man on earth talk your stock up.
I do not want companies handing over portions of their equity as a bribe to get crowned as nationally favored giants. The government’s job is to tax the winners and the losers on the same terms, and then to push these companies to go public sooner so the American public can buy in and day-trade the AI boom themselves if they want to be degenerates. We should call this what it actually is: Zesty socialism with a sprinkle of corruption. (I apologize for getting more political than usual, but I can’t believe it has come to this. Utterly ridiculous.)
THE SLOPPENING
Is AI music slop? Suno is the most popular AI music maker in the world, and it just raised more than $400 million, at a $5.4 billion valuation. This valuation is more than double the $2.45 billion they were at 7 months ago. This is one of the very few AI breakouts in consumer, so it is worth examining the actual metrics. It has roughly $300 million in annual run-rate revenue, spread across more than 2 million paying subscribers. At $5.4 billion, the market is paying about 18x revenue to own a slice. For comparison, Spotify trades at about 4.75x revenue multiple. This is a rock-solid business, with a hefty premium being paid for it.
My working definition of slop is that it is content that makes you stupid. It doesn’t matter if the content is AI-generated or hand-crafted by union members. Stupid is slop and slop is stupid. And in this case, I would argue that Spotify is the slop company, not Suno. Suno is a destination product that proudly proclaims it is AI. You go there to make AI music; there is no ambiguity. Spotify is the inverse. I go there to listen to art, hand-crafted by people I admire, but now it’ll quietly surface AI tracks into the feed when you play music in the public domain, or is instrumental (because it is cheaper for it to do so).
That is the real Sloppening, and it has almost nothing to do with the machine that writes the song. The rot is the distribution. AI you never asked for, surfaced inside a catalog you trusted, wearing no label. I have met people on the Suno team. They struck me as genuine lovers of music who also happen to be tech nerds, and are trying to use this tech to help more people love music. If you haven’t, I recommend trying it out. It is fun to make stuff!
TASTEMAKER
Two recommendations this week:
Radiohead’s Motion Picture House: On Thursday night I went and checked out this art installation/movie from the British rockers. I kinda just expected some remixed Radiohead music, but the band swung for the fences with a challenging yet cohesive reimagining of what their music could look like across a variety of media. Highly recommend it. Currently in Brooklyn, moving to Chicago, Mexico City, and SF later this year.
Ragtime is the greatest musical I’ve ever seen. On Wednesday night in NYC, I caught this show which is nominated for 11 Tony Awards. To be transparent—I don’t even really like Ragtime as an artistic construction. The music is a little simple, the storyline heavy-handed, and the writing a tad formulaic. Just about everything is a little pedestrian for my taste. But the execution by this cast and crew is so undeniable that Ragtime’s flaws didn’t matter. Every single aspect of the show is being done at the highest level, and Joshua Henry, the male lead nominated for Best Actor at the Tony Awards tonight, is a force. (Watch him sing some classic musical theater for a taste of the best vocalist in NYC today.) Y’all should see it ASAP. I counted 7 standing ovations during the show and 2 songs that made me cry.
Go and be kind this week,
Evan
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