Hey, what's going on everybody, welcome to the show.

On today's show, we're going to be talking about the algorithmic price tag and that means like is AI powered dynamic pricing coming for everybody?

So the error of the fixed price is, is rapidly drawing to close and it's being replaced by this new paradigm of like more of a fluid AI data-driven and and awfully intensely personal pricing.

And that brings up a lot of feelings about that, not only personal feelings, but government feelings and FTC and European Union feelings.

So AI we know is supercharging a ship from traditional dynamic pricing where prices fluctuate based on broad market conditions, which we're used to, to far more potent and controversial model, which would be the personalized pricing.

This this advanced strategy long confined to industries like airlines and ride sharing, which we're used to and hotels and things like that.

It's now poised to infiltrate mainstream consumer markets from everything from e-commerce to retail to fast food and and digital media.

Delta Airlines recently had a earnings report where they were very public about saying that they have been testing on just 3% with the hope to go to 20 percent 2025, this new system of like using AI for some dynamic pricing.

And they were very encouraged by the earnings report that was coming out of that.

So that's what sort of triggered me to want to do this story today.

But we're gonna go well beyond Delta.

So the real question is like AI, is AI dynamic pricing really just a different way of saying like price discrimination or even more importantly, pointly, surveillance pricing, which the FTC definitely has some opinions about.

So like I said, we're going to be talking about all of that today.

It's going to be a really, really fun conversation.

Today is July 29th, 2025.

This is the Daily Ad Show.

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Now with me today we have Jimmy, Andy.

I'm Brian and welcome back special guest for the next three days and early.

I'm in residence.

I'm in residence at the Daily AI Show.

Everybody, it's like.

Vegas, but I didn't get a billboard so.

Yeah, yeah, yeah.

Well, just you know, and I think, you know, we, we've all personally known you for quite some time and we have had you jump in on the on the show.

And you were generous enough when we told you about Beth and Aaron and Carl and all kind of being out and we lost half of our crew.

And like I, we need, we need some support here.

We need some other voices in the conversation.

So you're very kind to join us for the next three days.

So we're super excited to have you here.

Welcome.

Welcome to everybody in the chat as well.

Good to see everybody.

So guys, this one, this conversation, like I'll tell you, this is one of those ones where the more I dug in, the more interesting the conversation got like way more than just like the high level.

And I think Gemini, you know, I've been, I've been touting Gemini deep research because man, is it good, Man, is it good?

I know people say Manus is just as good, but man, I do love a good deep research, but it did a good job of just breaking down the three different like clear levels of framework or pricing.

And I just want to hit those really quick before we open up the conversation.

So just so everybody's sort of clear on the idea, like traditional dynamic pricing, that's a strategy where prices of a product or service are adjusted in real time based on broad, that's important broad market factors.

Crucially, every consumer sees the same price at the same moment, the inputs and variables of the time, day, overall demand, inventory levels, competitive pricing and seasonality.

So that might be like selling more umbrellas at a higher price if it's raining, right?

That's a pretty easy one.

Or go to Disney World.

It's 10:00 AM in the morning.

You're there with your family.

They're selling ponchos where they're on the back wall of a store and they're 5 bucks apiece.

But thunderstorms roll around in Florida all the time.

I live in Tampa, and now all of a sudden, there's the first clap of Thunder.

What do they do?

They roll the little wheelie, stand out with the ponchos right outside the store.

And now the price is $7.00.

It's still 5 on the back wall by the way.

But they they've dynamically priced this because there's an impending thunderstorm, right?

That makes sense.

We're used to that.

So then we have AI powered dynamic pricing.

This is something that's already happening.

Delta was talking about it, but we're not at personalized just yet.

And that's like the evolution of the traditional model where the AI machine and machine learning is used to analyze more complex and vast data sets to optimize price based on market factors.

The price presented is still presented all consumers at a given instant, instant, not necessarily day or time, right?

It's still generally uniform.

However, the AI can process marketing signals and at superhuman speed.

We know this, right?

So now this gets tricky because the art of if I buy six months out on a Tuesday at 10 AM for my flight going to JFK, I can watch those sort of signals and I know that that's a good time to buy those flights.

That sort of gets washed away once you get into AI dynamic pricing because there's way too many factors and it's and it's like Amazon they I read a stat that said Amazon changes their pricing on their site 2.5 million * a day, right?

That's the level that we're talking about, but everybody is still sort of paying the same thing.

It's just fluctuating with all these different variables.

Third tier, just want to talk about it's really quick and what could be coming depending on public opinion of it as well as the government opinion like GDPRFTC in the United States, these type of things is the actual price.

Price personalized pricing, which the FTC will label a lot of times as surveillance pricing, which they say is illegal.

But there's it gets the conversation today, right?

It gets into these nuanced areas of like, well, if there's no smoking gun, if you can't point to any one thing and AI is being able to bring in these personalized data points to change the pricing for me.

So that if every one of us, the example I gave is we all go to McDonald's, we all stand at a different kiosk and we don't individually see each other's screen and we all pay a different price for the exact same hamburger.

Dynamically AI hyper personalized, right?

That skirts into some of the illegal side of it.

But we also know that it can be blended.

It can be coupons.

It could be just in time.

It could be, hey, Brian, come

here at 2 A 2:00 PM, which Wendy's tried, by the way, about a year or two ago and got huge backlash for because people thought it was surge pricing and they said you're not going to surge price me for a hamburger.

And they got a lot of pushback and they had to roll back what they were actually trying to say was, oh, we're going to incentivize you to come in and get a Frosty on a really hot day.

Not that we're going to charge you more.

We're going to incentivize you to come in and get a discount.

But people heard what they heard.

It sounded like Uber for Wendy's hamburgers and there was massive pushback.

All right, so we sort of laid this all out.

You guys heard me talk plenty.

Now, I would love to hear your thoughts on this and what what you sort of uncovered.

And since you're the guest, I'm going to throw to you first, what are some of your thoughts about this dynamic pricing and maybe where is potentially going good, bad?

Well, like you said, it's the, the the as you peel this onion, you know, one layer at a time, there's more and more nuance to it.

It was hard for me to like develop one point of view as I tried out different use cases in my mind, like the air, you know, Delta.

I'm unimpressed by that because I feel like I've been sitting next to people for the past, I don't know what, 10 years who definitely pay different prices for their tickets than I did.

Sometimes I knew I was paying way more because it was, you know, somebody booked it for me at work.

Sometimes I felt like I was winning because I knew that I got the very best deal, right.

I booked it ahead of time or I've been accustomed to that feeling of man, I booked my ticket on the wrong day.

I should have bought bought it yesterday because now it's, you know, a third more.

But when I started thinking about some of the other other, you know, consumer decisions that we have to make, thinking about food, thinking about gas, thinking about even what it might be like if AI was used to fix the student loan, the student loan decision making process that I think is pretty broken and is now we charge people, you know, if Delta is saying it's the pay as much as you can model college is the pay 10 times more than you can possibly pay model with no recourse.

So I did begin to think of some positive implications of this, like what if AI was used for college pricing and it actually more fairly gathered data or gathered more data that is more fair on families about what they could actually pay so.

So.

Potentially maybe help with equity versus, but it also may hurt, it could also hurt equity, right?

It could also hurt.

It could help.

I mean it's like everything with AI and it all unfortunately boils down to some pretty sketch ways of collecting data.

Those are my thoughts.

Jimmy, Andy.

OK, well, let's, let's, let's start from the beginning, shall we #1 let's.

OK, this is my personal opinion.

Search pricing, price gouging, adaptive pricing, if you want to say it nicely, it's just wrong flat out the IT.

It all depends on the perspective that you're looking at.

All right?

If your goal is to make as much money as possible, no matter who it disenfranchises or takes advantage of, then absolutely.

But if your goal is to provide a good and service for the benefit of your customers, then this does not work.

It would be different if it was a race to the price to the bottom, but it's it it, it could be, but I have not seen any evidence for the last 40 years that that shows that.

Now, now that that's out of the way, what are the implications?

Because you said something in your intro which was was really interesting about the umbrellas.

We are used to that and I think that's where the the key movement is going to be.

What behavior are we going to see that will be implemented that we will grow accustomed to?

And you know, on a surface level, this could be something as, hey, this is a new process and we need to guide our customer base into learning how this process works.

I think airlines are or air travel is a great test bed if you want to test out this, this methodology, because we already have seen airline pricings like, and like you mentioned, ticket pricing is different.

They've created different ones, different seating arrangements, different perks for belonging to the club.

You know, there's all these multiple different levels.

And in the end, the goal is to try and get as much money as possible for it.

And what is mitigated is the amount of perks or the type or the destination goal, you know, destination advantages, these kinds of things.

And to meet that or to, to best play this game that the, that the system's been created.

This is where you get things like mileage points and being able to do these card churning things and be able to use AVPN to be like you're from somewhere else, which will get a cheaper price to get that ticket that, like you said, six months in advance, buying the tick because I know that it's going to go.

But then of course, the airline then counters with, well, where our prices are only going to be different two weeks out or a month out, you know?

And So what it seems to me is it's overcomplicating the whole process.

If we add, if we go through, if the thinking is that we're just adding more and more complications or more rules, that was like, if we tweak this, it'll take them like 2 months before they realize that we're making more money off of them doing this thing.

And then people come back going, well, we want to pay less.

So we're going to try and do this thing to counter that.

I mean, it's, it's just an escalation, right?

And, and that kind of process, you know, it's just like ads and AD blockers on a web browser, you know, it, it, they're constantly going back and forth updating, you know, same thing with like antivirus and malware.

And so I, while I personally believe it's you're, you're overcomplicating everything and the, your, your premise, you might want to re evaluate the premise or the what your, your value statement is.

In the end, everything's just going to develop so that the people who are paying the money try to pay the least and the people who are trying to make the money are going to be charging the most.

And it's just going to be a constant battle between that.

I mean, that's.

What already happens though?

I mean that is already in the model.

Well, yeah, but that the competition tends to be against between the companies, not between your customers and your product.

That's where I think the biggest conflict is same with like search pricing when you mentioned with Uber, the behavior now is I will wait an extra 15 or 20 minutes so that the price goes down two or more dollars, right.

So that's, that is, that is a behavior whether it's intended by Uber, whether that's about a logistic controls, you know, those kinds of things, it's still a behavior that the customer has taken upon themselves to take this disadvantage or take this this behavior change because the company is obviously doing something that the customer doesn't like, right.

And so I think, I think at the root of it, this it does require a perspective change from, from those offering the goods and services.

Again, it is what it whatever your goal is.

But overall, I think this is just really complicating just one more layers like, OK, now I have to what I got to build, I got to build my Chrome extension or my AI app to counter their AI app so that I can find the best pricing.

And then what does this mean?

Now we have to do collective borrowing, bargaining, so if everybody says no, we won't buy between this time and this time so that it forces the price down.

Yeah, you're making it harder for me.

Just make it easier for me.

That's that's kind of what I want to get out of this.

I'm really.

Glad you used the term collective bargaining because you know there there is an answer in collective bargaining, but it's very hard to coordinate until you get agents and AI in a Co-op that can actually provide countermeasures that are information based against predatory pricing.

Let's call it just to generalize the whole thing because you know, a supply and demand based pricing is fundamental economics and it's it's it works especially if there's the availability of competition to enter into a market that has gotten out of whack because there's a limited supply or a monopolistic supply.

And monopolism can actually happen either through control of the supply or control of the information, right?

And that's the scary part of this, because we all want to make sure that we're getting something that has some correspondence to the underlying cost and that there's not a huge umbrella price on top of it that's being being added as a tax on consumers because they can, right?

So if I'm the only person who has this product, I can price it wherever the the customers are willing to ultimately to pay because it represents that much value to them, right?

So there's a value component to it that's not related to the cost of delivery.

If I start out in the market and I discover something that has a really great value to customers but doesn't cost hardly anything, should I be forced to price it close to cost?

Or can I, for a period of time until competition Enders, can I charge way more than that?

But let me go back to the Delta example because I think, you know, that kind of customized pricing to maximize or optimize the profit that's available for the seat that's being sold is possible if you're on delta.com.

But it's hard if you're willing to go to kayak.com or Google Flights and you're willing to move away from Delta because airline seats are kind of commodities that, you know, I at least from my perspective, I don't have any real preference for one airline over another.

I'm really looking for the greatest convenience for me in that travel date per dollar and, and I go after that value and there's an information system that will supply that to me.

So I, I want to just say there's these all these possible information countermeasures to the scary possibilities of customized pricing that will emerge as a competition force.

But there will also be people who will compete against Delta directly in the airline industry by putting their prices, you know, on a different basis.

And so that could actually shift the travel population away from Delta if it's discovered that, hey, every time I try to book a Delta flight, even though they've got a little more convenient schedule for me, I can save hundreds of dollars if I just, you know, you know, add one hour to that transit time of eight hours that I was originally going to have.

OK, Now I want to just end by saying, you know, when I thought about this subject, I thought, isn't this another means of transferring the burden of costs to those who can more easily afford it?

And, and maybe that's OK if there are people who will pay more for the convenience of not even haggling, right?

Quick transactions and and and just superior ability to pay the billionaire class.

You know, maybe that subsidizes those who are more resource constrained and it's OK.

So I don't really mind if Delta charges rich person won $1000 more for that flight because they don't care.

And and they're willing to pay $8000 for that ticket to sit in a little bit wider chair.

I don't mind because that's subsidizing my ability to pay.

Right.

Or at the same fundamental service which is I'm going to get from A to B.

Yeah, look, you.

You if, if they do it that way, it it behooves them more to do it as OK, well, they're willing to pay more and you are gonna pay more too.

That that's what's gonna happen now.

Also, how many billionaires would it need and how high would it need to actually subsidized everybody else?

Billionaires aren't taking the Delta flight, you know, red eye to Jersey.

They're they're flying on their own plane.

But how many people pay $5000 for a first class seat that I would I, I'm not in a class that's not going to be me anytime soon that I'm aware of.

I don't see me doing that when the, the less comfortable seat in the back that's not in the exit row is with no knee room is going to get me to the same city at the same time.

And you know, I'm going to pay less.

And they have the money and they're paying for convenience and I love that for them.

Then they should be the first ones off the plane.

I think they're paying for that, right?

Totally fine with that.

Better food, the whole thing.

What I want to say to this and like bring it back to you guys and and everybody, it's not necessary.

I'm not saying it's always a good thing because and as you said, the equity thing is tricky.

There is just as many ambiguous areas where you go.

This could potentially directly affect those who have less.

It could, right?

There's, there's potential here.

It also could actually work out better for the consumer.

Andy, you were talking about Delta or Uber or any sort of dynamic pricing.

It also invites the opportunity for a Frontier, a spirit, a Southwest or whoever to be competitive against Delta and use the same AI and dynamic pricing in order to ensure, just like Amazon does when they want to be competitive against Walmart or Target or others, to ensure that they have the lower price is still going to get you from city to city.

What I really think we're talking about here though, is because of AI.

We're not even talking about the personalized side.

We're just talking about AI dynamic pricing that second tier I talked about.

What we're really saying though is that the error of getting the deal or being in on it or knowing how to do that, I think is going to go away.

So the the because of the black box nature of algorithms and AI and it being literally thousands of points of data that are being changed in the algorithm by the minute.

The idea in the future that you would be able to figure out when the best time is to buy the Delta flight is not going to be as easy as it then.

Not that it's easy now, but a Tuesday, six months out, that kind of stuff that's going to go away because it's going to be very, very tricky.

And Jimmy, you're talking about build an app that doesn't.

I'm sure people will try their best to figure that out.

But also, guess what?

We're getting closer and closer to more heads up displays and Oakley glasses and meta glasses that are going to have heads up just in time dynamic, you know, ads that are going to be in the Geo location you're in, should you choose to share that information.

And so there'll be potential here, just like GDPR where you have to specifically say you're, you opt in to this information, right?

As the consumer, you're saying, I agree to get to transfer my personal information in exchange for the better deal, the better burger, the just in time, a coupon that only comes to me or whatever that's a transaction.

And so there's actually a lot of potential that is good.

In the same way that you're happy that you are part of the the Founders club.

If we started a paid community here and then we told, hey, you get priority access.

If you're already in our Slack community, what we're doing is essentially is saying, hey, you were early adopters, you were early listeners and supporters of the Daily AI Show, and we're going to treat you as such.

People who found us later do not get treated like you, your founder, right?

And so those people go, oh, I feel special.

I feel part of a group as they should.

This is unique to me in a small sector group.

And so I'm going to pay a certain amount of pricing because I was an early adopter, I was a supporter, which hopefully is only going to make them want to support us more.

And so I'm just, I just want to throw out there back to you guys, there's a lot of potential good that come come out of this even going all the way as far as the personalized AI pricing, I agree.

If people are opting in, I don't think people should have their information shared clearly if that's not what they believe is happening.

I actually think there's a future here where people willingly hand over more and more of their personal data across multiple apps because this idea of a McDonald's app, the only way McDonald's, you said it, Andy, are yeah, the D1 is Delta has to have that information.

Why does Delta want me to log in?

So they can track my information and my cookies, right?

Why does McDonald's want me to have an app or Starbucks to have an app for all the reasons they want to give me a coupon and make me feel special on my 10th visit, yada, yada, yada.

But I think AI is going to go across that and this idea that you would have to be in a specific app in order to get these hyper personalized, make you feel special ideals in the future, Which does mean my WTP, my willingness to pay might be a lower amount than you, Jimmy, But if I'm willing to opt into that for the chance of paying less, even though, and I think this is crucial, even though I know you might get screwed.

And that's where I think this gets really curious.

Will people like a Wendy's publicly backlash or if only some people on the inside with Wendy's had gotten that better dynamic pricing?

And they said, well, it's good for me.

And I don't really have to know who it's bad for.

I just know that I'm in and that's good for me and I'm looking out for number 1, you know, I don't know.

It's, it's, it's, I think this is going to get a lot messier and a lot trickier than anybody.

I, I totally agree it will be extremely messy because, yeah, now, now we're going into deeper levels.

Where are we looking at short term gains versus long term gains?

Human, Humans generally are short term game or gains kind of focused.

And the US specifically, the entire economy is based off of short term gains.

And so yeah, so it definitely goes to that, that lower level or that deeper level.

And then when you're mentoring, I'm looking out for #1 it's like, OK, well, is that a healthy is, is that a healthy perspective?

Aren't we all on the same team, at least if we all belong to the same club, right?

The same nation?

Shouldn't we all kind of work together so?

Yeah.

But does Ann know, does Ann, do you know I'm paying that?

Do do you know I'm getting a lower price?

And is that what matters to me or can I happily go through my life going?

I'm aware that because of my willingness to share my personal data across many companies globally that I often times and this is this is fact by the way, this is not Brian's opinion.

I often times get lower prices, not higher, not not price gouging or surge demand.

I get that that's part of our world too.

This is more likely going to bring lower prices to some.

It's a matter of whether you're OK with being inside that sum are.

You thinking, yeah, I think it's a matter of if you're OK with being part of it.

But it's also that the vast majority of people won't have have exercised that agency to say, you know what, I'm cool with it.

I want to get a lower price or I want so and so to get a lower price when I can pay a higher price.

So voila, have every scrap of data about me.

So that's, you know, I think we've got some examples of where consumers have have pushed back against companies even though it didn't affect them personally.

Like I think about the case with Budweiser last year or the year before with Dylan Mulvaney, the trans influencer and people, you know, they lost 27.

Budweiser lost $27 billion in market cap because they came out as anti trans and their fan, their fans came out as anti trans.

And the people who boycotted, you know, Budweiser, they weren't personally affected.

They weren't trans people.

They were in solidarity.

And I could see how even less kind of lightning rod themes like airline prices could have the same thing.

We saw the, you know, let them eat cereal.

General Mills boycott last year.

And you know, I don't we don't really care how much a cereal box costs.

I know it's a lot, but doesn't really matter.

But the the point of it, the audacity of it is what I think really motivated so many people to push back.

And we've seen it be, I think, way more effective than we would have imagined.

Now this goes to June Lee's point, though.

About how much of a pain in the butt is it going to be to be a consumer?

If I know that, you know, my road map for buying stuff includes I have to protest every other company so that I can change something so that I can get a fair price and other people can too.

Like, you know, I mean, there's there's also like a lot of people's, you know, doing the like, buy nothing, right.

So will we will enough people decide that it is just too much of A hassle to buy a plane ticket?

A percentage of people no doubt already have and said F it.

We're just going to get in the family truckster and we're going to drive.

So will that be happening with more and more services and and goods, particularly if we enter into a recession and people are already motivated to spend less money?

Yeah.

Could be a pain in the butt to have to get to to have the opportunity to buy things.

Jimmy.

Yeah.

No, totally.

And, and I think I, I kind of want to go back and highlight what, what, what speaks to what you're saying and as a root issue and kind of what you were talking about, Brian, is our perception and our perspective on data, right?

We've heard for over 1015 years now data is more valuable than oil, right?

It's the new gold.

Or, or what now?

It's the new gold, and it's that, yeah.

Right.

And it's and it and what we haven't shifted yet or is the understanding that data is ours, we make the data right.

We have no explicit rights right now.

Like on paper that says data is ours.

Only now is that shifting.

And I believe it's it's Denmark that is like saying, oh, you have automatically copyrighted ownership of your likeness and your biometrics and stuff like that.

But all data is created by the users, so it is the user's data and opting in to these programs that are, whether that be a social media or a free service or anything like that.

It's not that I don't think that word should be used free.

When when something derived from you can be used to make money, then it's not free.

That's the payment.

Yeah.

Right.

So you should be able to enter into your own contracts for that data like I, I want to have, I want to know who I'm selling it to.

I want to know how much I'm selling for how long and what my rate is going to be, right?

Because if that is the new currency, the, the new commodity is the data, then I'm the 1 making it.

So I need to be able to control it and sell it at my, you know, demand rate and, and all that kind of stuff too.

I, I think shifting that perception on the data will inform consumers on how they interact and how they consume and how they make deals with other companies.

And when I say make deals, I mean, this is, this is a contract, right?

You're going to collect data from me.

That means and you're going to try and make as much money out of that data as possible.

All right, well, these are the services that I am exchanging it for these this is the payment I'm exchanging it for.

I want to be paid XY and Z and I'm going to access to these services.

I'm going to be part of a larger network and this could be expand like off top my head, this could be like the new Costco membership, right?

Like we said, opt in with your data and now I have access to all of these kinds of things.

This is my larger network.

We're collectively bargaining.

We're in ADAO of of you know, you know, 144,000 people like that one DAO that was set up for Reddit user data, right, so that they could sell their collective data.

I think, I think shifting that perspective does that mentality does inform how, how we will interact with these kinds of micro adjustments or predatory, you know, surge pricing and and all those kinds of things.

And it, it, it is going to be a more muck filled, multi layered, complicated thing to navigate.

And it is just going to require more from the individual to have to think through what everything's happening.

And, and that's a form of obfuscation.

It's like, oh, well, we can put some pretty signs in front of you so you only pay attention to that instead of other things.

Or it's now 100 layers deep instead of 10 layers deep.

So you know what you're actually getting into.

I imagine terms and agreements and policies are just going to become, you know, 10 or 100 times longer to try and cover all of the eventual problematic interactions with a service or company or you know, like the whole arbitration clause.

Like if you use our service, you can't take legal methods, you have to use our arbitration, you know, those kinds of that kind of language starts filtering into all of these, all of these services.

So yes, I think there is the potential for.

For.

For good for people to get out of this, but it it's going to be an uphill battle there.

You cannot assume that anything, any organization you interact with out there is going to is going to have your best interests.

You need to have your best interests in this situation.

I agree.

I mean, Andy, I knew you were coming off, Chet.

Yeah, I wanted to say, Andy, you were coming off.

Of course I want to throw to you here.

Yeah.

So I, I want to say first that I'm skeptical that any collection of information about me and my past behavior can, can allow a company to exploit me because I, and along with my agents, you know, I have some constraints that I work with, like, and one of them is what I'm willing to pay.

And if I'm well informed, I'm not going to pay more than I have to in order to get something at a certain time, you know, with a certain package of, of features.

Now there's a, a big company called Google that built a platform called AdWords that uses an auction system that kind of removes all of this sort of predatory pricing.

So in the AdWords system, you say what the maximum is you're willing to pay, but it doesn't mean in based on the the actual mechanics of their system that you're going to pay that highest price.

It's not a bid that then automatically gets accepted.

It's just the range in which you're willing to pay, but you might end up paying much less than that based on the demand and other bids for that particular slot in AdWords for that search term that comes up, and so on.

Well, AI has the potential to do this on a mass scale for all kinds of products, not just advertising.

And advertising is interesting because it's, it's an expiring product, right?

I, I have a, a, an expiring opportunity to put information in front of a customer that appears based on their action in the browser, appears to have an interest that's related by some number of degrees to what I sell, right?

So I want to put that out there and, and there's only a certain amount that I'm willing to pay.

Imagine now a future where, you know, a company, a Delta Airlines or whoever has a lot of information about me and the way I'm practicing my purchases.

I'm saying to my agent, look, I'd like to go to Spain next year.

I don't really want to pay more than $800 per seat for the people in my family.

So start working on that and see what you can find.

Now there's behind the scenes a, a, you know, massive deep research effort that's underway that doesn't really prey upon any of my predilections at all.

I've set a price and there's a, there's an algorithmic approach behind the scenes that's going to try to meet my objective.

And I have an agent that's working in that interest.

And on the other side, there's a system that's trying to figure out how to stop, you know, the decline in price that's necessary due to the competition and the availability of alternatives in order to get this agent to close the transaction at a high enough price that they can make some money on it.

And they have all kinds of reasons why they might want for planning reasons to be able to take a lower price early on in the process in order to guarantee their scheduling and all of that sort of thing.

So I'm optimistic about the ability of, of AI smart systems to adjudicate all of those factors in a way that's way beyond what AdWords just did for this narrow market, which is just advertising.

And you know, that was very profitable for Google because of the scale they achieved.

But it ended up being practical and profitable for people to use AdWords as an advertising mechanism compared to print, right, or compared to television or radio.

And so it worked because it was quite targeted and it was, it was quite cost effective.

And then other alternatives came out like Facebook advertising, which was in competition with Google Adwords.

It wasn't, it wasn't purely search.

So I don't know, I, I, I know we can get kind of rattled by the idea that, you know, I might have just paid more than I had to.

And and I think that AI is going to be one of our best buddies when it comes to ensuring that I don't ever get in that situation.

I think the push back there as I see it, Andy, is I'll give you a perfect example.

Almost this time last year had that miserable flight that came home from I was flying home from London, was supposed to go to DC, land in DC and then and then take a flight about an hour later out of, I'm sorry, out of Philadelphia to Tampa.

As we got Internet services, we hit the ground.

We saw that our flight was cancel 2-3 hours later, which then had this ripple effect that caused my family to take a 16 hours straight drive from Philadelphia back home in order to get my daughter home in time for school.

That happened, I talked about on the show last year and it was miserable.

And it, it just was miserable.

There's nothing about it where, you know, I'm standing in the middle of a train station in, in downtown Philly, you know, trying to figure out how I'm going to rent a car and get home straight.

And it cost my family money and all that.

Part of that situation that actually made it harder on us was that we had not not booked directly through.

It was American Airlines, we had booked through our credit card because we had points and so on and so forth.

And despite the credit card having good customer service and stuff like that, there was no doubt about it.

We were at a clear disadvantage because we had not booked directly through the site on a hyperlocal scale.

We see that with like grub hubs and things like that with local businesses.

The local sushi shop down the down the way says, hey, please go to our site and and get your food.

We'll deliver it to you the same.

There's no difference to you.

But would you come to our sushi website or our app and order the food?

Because we definitely make less money as the local business, a small business.

If you have to go through Grubhub, they take a lot out of that and our profit margins are slim to none.

It's kind of killing us.

We know you want the the delivery, we need you to kind of go through us.

So the reason I bring that up is where I think we have competitive advantages, you're right with agents and AI and how that will help us combat against that.

I think businesses will say, well, perhaps the advantage of you paying that WTP, the willingness to pay whatever that price is, is you should go through US Airbnb with, I will only go to Airbnb's that have free cancellation up to 24 or 48 hours behind it.

You don't get my business on Airbnb unless I can do that because I've had issues where things have changed.

We all went through COVID and you just have to cancel.

Sometimes it happens, right?

And I don't want to get hit for that with a hotel.

I have to pay more to have a cancellation, right?

You've gone to hotel sites and it said, well, it's this fee for your room with 0 cancellation, just lose your money if you don't show up or it's instead of

250 a night, it's 3:15 a night, but you can cancel up to 24 hours from it.

And then where is the value to me as the consumer?

So I only bring that up.

Andy has a counter argument to say, yes, I agree with you, but but won't they just push us towards their sites?

They collectively Delta name it, name a company because they will have you all best better customer service because you'll have less problems if you go through them because they're going to help you solve your problems.

Whatever the reason is that would perhaps shift my opinion of that and say I could go use an agent to do this.

I could get Jen Sparkamanis or probably AI agent mode right now to get me the best prices to Spain.

But I also might want to say like, well, I don't know what the, the, the, the airline is.

So I'll just pick an airline, you know?

Well, you want to go to this airline and it is going to be more expensive.

But I'm thinking in the back of my head.

But yeah, man, if things go South and go sideways, like I had to go through Philly in that miserable situation, I'm going to pay more.

And now I'm back in their system.

They've sort of forced my hand back in that system.

Or you just go, I'm willing to, I'm willing to wing it and see what happens because I am getting the lower price.

But man, if things go sideways this could get tough for me.

I'm not sure how that works at like the level of a hamburger because it's not a 4-5 six $700.00 purchase, but I do think this has ramifications throughout the whole system if I had to guess.

Yeah, I, I, I agree.

I, I hope, I think, I think if I'm going to view this from the hope angle, what will eventually come out of the conflicting forces is that we will just have a new way.

And this could be the agent, the AI agent way like you said, Andy, where it will do all of that heavy lifting for us based on what our parameters are.

But I suspect if you have more resources to throw at something on your side of the equation, if the advantage is going to come out to your your advantage, you know?

Like Andy is saying, you're saying?

Yeah.

And I think, I think for a real simple analogy, it's like the casino, unless you're there to just be entertained and play the game, the house is always going to win.

And as long as you spend more and more time there, the house will win more and more and more otherwise games of chance.

If it wasn't set up that way, casinos would go out of business.

But they don't, they make a lot of money.

So it's it's I think, I think that that view of the system and what kind of changes that would have to be made so that you have a clear advantage that's going to require a lot more than I think we are all prepared or or realized needs to be done.

And, and that, that kind of goes to the crust of this, right?

It's like, where is this going?

I don't know.

I mean, look, I, I did the research.

I looked you guys did too.

I don't see a clear answer here.

And you were kind of saying that there's not like a clear answer.

And, you know, maybe some, a place for me to just sort of wrap this up for the day.

It's just a few questions that actually Gemini 2.5 deep research came up with.

I think some of these are worth asking.

One of the ones that I like is if you're loyal to, if your loyalty to a brand means an algorithm learns you are willing to pay more, is loyalty now a financial liability?

I think that's a great question.

Something just to think about right as we're wrapping up today, or we've moved from a world where the price is the price to a world where the price is a secret negotiation between your data and an algorithm.

What does that do to our trust in the market?

I think that's a good question.

If I was to throw one more at it, when Wendy's tried surge pricing, they put that in quotes for Burger.

There was a massive backlash, but we accept it from Uber.

So where do we as consumers draw the line and why do we draw the line there?

And I think a lot of it goes back to where we are currently used to it and where we haven't gotten used to it.

But man, is that a slippery slope.

We've seen it with AI, how easy it is to get used to having agents in our life at seeing walking robots on the on the sidewalk.

It is so easy to slip into the new norm that what I, I not fear, what I believe is that one year from now, we can have the same conversation.

We'll earmark it, we'll talk about this again in a year.

And we would be saying collectively, oh, you know what, we all have sort of accepted that it now happens in these three new areas.

And it just naturally did that because AI is shifty like that.

And so I think it's very easy for us to get really, really accustomed.

I mean, 10 years ago, nobody was talking about Uber surge pricing.

Nobody was talking about that yet it's a thing.

And you brought up a real use case with that.

Just the last thing I'll say.

Not that long ago my wife and I were in Orlando.

We took an Uber from one place to to the city walk.

We're at Universal Studios in Orlando, right?

We go to leave.

The Uber is now $15.00 more for a two mile ride.

Why?

We're standing there in a mass of people who all want to take Uber out of there.

What did we choose to do instead of paying the $15?

My wife and I are a little cheap.

We got on a Universal Studios bus to the most the closest hotel.

We took the free transportation to the hotel and ubered from the hotel back to where we were going and we paid 15 less dollars for it.

Did it take us longer to do that?

Yes.

And I think everybody is going to be going through these individual use cases and deciding where it matters to them and where it doesn't.

And there won't be any 1 collective answer.

It'll just be a lot of individual figuring out or like you said, and I like, like, I don't know, does that mean that I now have to research and decide who I'm publicly for or against and where my morals, some values?

And like, do I have to do that for everybody?

That sounds exhausting.

I don't want to play.

I refuse to play the game.

Right.

OK, listen, we're gonna wrap this up for today.

But look, tomorrow we're coming back.

Jimmy will be hosting and we'll be back.

As we said, it'll probably be the four of us.

I'm all talking about all the latest AI news that we think is really interesting over the last

7:00-ish days or so.

So that's always a fun episode.

Come back tomorrow.

That's our standard for Wednesdays.

On Thursday, we're going to be talking about.

And as I say that, it went out of my head.

Somebody helped me out.

It's my.

Hiring AI and hiring.

Thank you AI and hiring.

They can see hands on top of it.

Thank you Anne.

AI and hiring, which is also going to be a juicy topic because man O man has AI.

You know what the you know the the S the bed of hiring for both people looking for jobs and HR.

That is 1 area where I feel like AI is not doing anybody any favors right now.

So we're going to dig all into that on Thursday, Friday, we'll be back talking about Madison and Genspark.

Andy got us kicked off yesterday with an amazing Genspark demo agent mode.

What are we building with agents right now?

What does that mean to us?

And like where are we finding actual use cases?

As we always joke, No, not visiting every Major League Baseball park is opening.

I suggest it was a good use case or going to see the next 7 Lakers games, right?

That's not a good use case.

What are we actually doing and using agents for?

And like I said, Andy had a great one yesterday to get us going.

So that's all of it today.

Thank you everybody in the comments as well.

Don't forget to like and subscribe.

Hey, look, I just put it out there.

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This is probably the first time you've even ever seen us before or whatever.

So if you like these kind of conversations, we're we're on episode 517 man, we've been doing this August 8th is our two year anniversary.

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And yeah, I think that's it.

Jim, you want to take us out?

Aloha.