Unofficial Partner Podcast

UP552 Chat_UP: Google's AI pivot and the end of the subsidised era

• Richard Gillis

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Chat_UP is Unofficial Partner's AI series created in collaboration with TFG Labs.

The brief: cut through the AI firehose, work out what matters, and bring it back to the business of sport. Three stories this week.

Story One — Google I/O 2026

Google used its developer conference to reposition from "a search company that does AI" to an AI infrastructure company. Headlines: Gemini 3.5, Gemini Omni (real-time processing) and Gemini Spark, a proactive always-on agent that brings agents to search. Plus "Ask YouTube" — pulling answers out of videos rather than watching them.

Why it matters for sport: if fans send agents to fetch scores and highlights rather than searching themselves, the SEO-built internet shifts under everyone's feet. It raises hard questions for the sponsorship measurement economy (it's an agent engaging, not a fan) and for anyone building on someone else's land — Google can devote a team to your idea and eat your company. Andy's takeaway: get your house in order, own and structure your own data so you can switch foundation models at will.

Story Two — The End of the AI Subsidy Era?

A cluster of cost stories: Microsoft cancelled internal Claude Code licenses over token-based billing, Uber reportedly burned through its 2026 AI budget in four months, and US AI software prices jumped 20–37% in six months. Is the bill finally landing?

Why it matters: SaaS-era seat pricing is breaking down as agentic systems do the work of many. The in-housing dream — replacing agencies with "two smart people and a model" — looks shakier once you absorb the price volatility the vendor used to carry. For low-margin, high-volume businesses (betting being the obvious one), a few percentage points on cost-per-inference is existential, not a line-item. Andy's counter: much of this can run locally on open-source models, and Chinese models are catching up fast at a tenth of the price.

Story Three — Bryson DeChambeau & the Athlete Creator

The golfer-turned-YouTuber, in contract talks with LIV, is a proxy for the athlete-creator question. He's been on the AI train for years — using and then leading an eight-figure acquisition of AI coaching start-up Sportsbox AI.

Why it matters: the collapse of production cost liberates the wannabe Brysons, but the real change is top-line — launching clothing lines, apps and realistic content without occupying an athlete's training time. The deeper thread is disintermediation: leagues being routed around by their own star athletes, and the old rights-holder puzzle of making space for personalities while selling exclusive TV deals.

About the co-host

Andy Shora leads TFG Labs. His background is QuantumBlack, McKinsey and BCG Gamma — a wealth of experience from outside sport, brought to bear on the sector.

About TFG Labs

TFG Labs is the innovation engine of TFG, a business evolving from data-and-insights into an "augmented intelligence" company serving sports organisations. Labs was set up to get ahead of AI and build practical agentic systems that solve real problems in sport — deliberately not chasing the hype cycle.

Got questions or voice notes? Send them to Richard via the Unofficial Partner Substack newsletter.


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Speaker

Hello there, Richard Gillis here. Welcome to Unofficial Partner we're talking AI Today and Chat Up is our series that we're gonna run through to the end of 2026. The brief we've given ourselves is to look at what's going on in AI and try and interpret it. Try and pick out what is important, what isn't, and then try and bring that back to the podcast and other material, to the newsletters, et cetera, et cetera. And we're just trying to work out why do we care? Why do we care now? What are the decisions and the questions that are being provoked by this new tranche of technology? There are very few people who can play the interpreter role at this point, and we've got one. Andy Surer is steeped in technology and ai, but he's also got a foot in the sports world via his role in charge of TFG labs. Before we get going, I wanna talk to Blake Wooster, who's founder of TFG, uh, about his hopes for the series. Which has emerged from an event that we did at fuse in the UK at, uh, Omnicoms London headquarters on the South Bank. We all enjoyed it, but we agreed that there was too much to cram in to one evening of conversation there's a whole load of different conversations to be had, and we needed somewhere to house them, and that's what Chat Up is doing. So I'm really pleased to be doing it with TFG because they're at the front of this stuff. They know what they're talking about as opposed to a podcaster who is bluffing his way through this sort of landscape. Anyway, here's Blake to explain. We have a chat about what the point of this series is.

Blake Wooster, TFG

First of all, very happy to be here. It's my um, UP debut,

Richard Gillis, Unofficial Partner

been, I've been

Blake Wooster, TFG

I-

Richard Gillis, Unofficial Partner

you to come on for three years,

Blake Wooster, TFG

Yeah. Obviously we did the live event, as you said, back end of last year which we really enjoyed. It was a bit of an experiment as we kind of knew and framed it at the time, and there was very much a spirit of this might not work. But much of it did on the night actually, and, so we really enjoyed. I mean, not least the AI that we deployed on the night whi- which worked and I thought made the event just more interesting than your usual vanilla panel event of folks, just chatting about AI. And so, so kudos to you, Richard for kind of lead, leading the charge on that. And then I guess, like, since then, the world has moved on, right? And things are happening at pace. there's stuff that we can do now that didn't even seem imaginable even six months ago when we did the event. And as you said, kind of AI seems to be the thing on everyone's minds and so we thought this was a conversation worth continuing hence why we're, hence why we're doing this series together. So, so I think in many ways, it's really kind of continuity from the live event and as you implied we feel we're pretty well-placed to participate in that conversation given how we've been evolving our own business and also our proposition.

Richard Gillis, Unofficial Partner

I'm always very aware when I talk to any organization or, and particularly in the sort of consulting service sector, things do change. And so people will put TFG, 21st Group into a box because that's what we do with everything. I came away from the experience thinking, quite a lot of my preconceptions about what you do are probably very outdated and are all wrong.

Blake Wooster, TFG

There's a few reasons for that. I mean, we, we rebranded the company as well kinda halfway through our life cycle, and so, the business has changed and evolved, a- as I think any business, sh- should do in order to kinda stay fresh and relevant. One of the reasons f- for what you just described is we've been go- undergoing a massive evolution. So who we are is changing and evolving pretty rapidly. I mean, historically, I think we've been known for probably being, to, to most people a data insights business. Although, like you said, there's, people know the brand, they recognize the brand, and I'll chat to them at events whatever and they say, "Oh you guys seem to be doing well. But what is it you actually, do?" And so, there, there is a bit of that associated with our brand. But certainly previously known probably for being a data and insights business, whereas today I think it's fair to say that we are transforming into a AI-first company, something that we're referring to as not artificial intelligence, but augmented intelligence to try and unlock I'd say measurable advantages for sports organizations. So we started largely serving kind of teams really around

Richard Gillis, Unofficial Partner

Yeah

Blake Wooster, TFG

performance. But today we're kinda working across the ecosystem, including teams, investors, competitions, federations, brands, broadcasters, betting and gaming operators. And I think particularly relevant to this conversation we've also got TFG Labs now, of course, which was a deliberate attempt a couple of years ago to try and get ahead of what we felt was a, this unstoppable thing coming towards us, which was AI. So that's headed by Andy Shaw, uh, obviously who's gonna be leading for us on this pod series, who his background is a kinda QuantumBlack, McKinsey, BCG Gamma, so he came with a wealth of experience from outside of sport. And the purpose of Labs is to really work on, uh, groundbreaking sports intelligence. So trying to kinda push, n- not just AI, but push- pushing the boundaries, generally setting new standards, trying to master the technologies of tomorrow. And so we kind of see Labs, as our kind of innovation engine and playground. But I use that phrase a bit cautiously 'cause I think importantly, we're, we aren't trying to chase the AI hype cycle. We're trying to kind of build practical agentic AI systems that kind of actively solve what we believe are some of the biggest kind of, problems in sport. So, so yeah, the business has been evolving. But today and moving forward, certainly we are going all in on the kind of AI revolution but definitely doing it in our own way

Richard Gillis, Unofficial Partner

It's interesting. So, I mean, Andy I got to know obviously at the event. He then... I mean, one, one of the things was and this plays out in the conversation that people are about to hear, in the first episode, which is that I sort of come with one thing, and then he takes that and takes it sort of several levels forward, and that was part of the enjoyment

Blake Wooster, TFG

my life working with him every day, yeah

Richard Gillis, Unofficial Partner

I want him to interpret the outside world and, I, I can do a job of working out or trying to sort of say, "Well, this might apply to this bit of the sports business." And so you're of linking from the outside in quite often. there are two types of stories really that we're looking at. One is something happened outside that we're gonna in, and what does this mean for people in the audience of Unofficial Partner who predominantly are working in and around sport and the business of sport globally? So we talk about Google's announcement, a raft of new things that someone like me thinks, "Shit, I need to... Do I need to know about this or do I not need to know about..." These things happen so often that I need to out what to do. So I'm running... Andy is interpreting that for me and bringing that back in, which again is a really useful service. The other type of story is something is happening in sport which then is gonna be supercharged by AI, or how is AI gonna impact that? And we talk about Bryson DeChambeau and the athlete creator, just as a proxy into that production area and how AI is sort of changing things. So you've got two different types of story there. And then the other story that we talk about today, which again is relevant for everyone who's listening, is cost. And I think, I learn a load, and that's not just a podcast host saying, "You should listen to this." I came away thinking, "Okay, uh, my behavior's gonna change," because what Andy has just told me about how I'm wasting money on using one model when I shouldn't be doing that, and the big question that we'll push out across social is is this the end of the cheap era, are we about to go into, is the reality of the bill gonna hit people? And what does that mean for people in various parts? 'Cause if you've gone into AI saying, "Right, okay, this is brilliant. I can get rid of everyone," which is what a CFO, the cliché CFO response. You're starting to think, actually, be careful with that idea because the risk of cost if you take that in-house, y- the volatility of the cost, you're taking that with that decision. And depending on where you are and how you're using the models and how, if you're building things on top of Google or Anthropic or whoever, what that does to the decision-making process I think is really interesting. So I come away from this episode thinking, "Yeah, do you know what? I came in with a set of-" Probably naive assumptions, but quite primary color type things where, okay, cost-cutting, i- in-house, outhouse, those types of things. Andy then took those and has taken me sort of two or three stages further forward, which is exactly what I wanted him to do. It's really interesting

Blake Wooster, TFG

Yeah, I think there's, we're, we're obviously seeing, I've already touched on the kinda pace of change, like new decisions for sports leaders

Richard Gillis, Unofficial Partner

Mm-hmm.

Blake Wooster, TFG

emerging which I, for one, am kind of, it, gr- grappling but also kind of em- embracing here as a business. So that's kind of one side of how I'm thinking about things is what does this mean internally for TFG and our culture and what we're doing as a company and what we stand for primarily. But then also as a very kind of client-first organization. We are a B2B company that serves sports organizations in the ecosystem. We're obviously trying to think more about what, how this changes, if at all, our offer to the market, what is our proposition moving forward to, again, teams, rights holders, brands. But also there's something more f- fundamental or philosophical here, which is, what does this mean in terms of our purpose as an organization? And how I hope and I believe that we can use AI to, to deliver better sport.

Richard Gillis, Unofficial Partner

Brilliant. Okay. Right. Coming up, and Andy Shore get into AI and sport. In the meantime, Blake Worcester, thanks a lot for your time

Blake Wooster, TFG

Thank you

Richard Gillis, Unofficial Partner

We've got three stories that we're gonna talk about today or three main stories, the first one last week there was a big Google announcement. So Google I/O. Is that how you say it? Is it I... I/O? Yeah.

Andy Shora, TFG Labs

that's right, yeah

Richard Gillis, Unofficial Partner

I, I, I don't wanna trip up in the first, first sentence. So Google used I/O 2026 to formally, what they're calling sort of reposition themselves from a search company that does AI to an AI infrastructure company. And I don't quite know what that means and what the difference is, but I h- I'm hoping you're gonna help me on that. And the headlines were, uh, Gemini 3.5 and Gemini Omni for real-time processing. Again, you'll explain what these words mean. And then Gemini Spark, which is a proactive always-on agent. So that was the press release, and then within that, there is a Ask YouTube function, which got a lot of coverage in terms of that felt like a shift in my relationship to YouTube. And again, that I think is significant for our, a lot of people in our audience 'cause that's where a lot of the, conversation is and a lot of the content is heading. So I looked at this, and one of the challenges that we've got here, me personally, is just keeping up with this stuff, and trying to work out do I need to know here, and what can I just someone else deal with and I'll come back to? 'Cause my personal usage of, language models at the moment, I've, settled on Claude with a bit of NotebookLM, but then people are coming in with all these sorts of other things. So when you looked at Google I/O 2026, what did you see?

Andy Shora, TFG Labs

So, let's first talk about how difficult it is to keep up today, with the news in tech and the speed of the evolution in, the apparent accuracy and speed of these models, what they can supposedly unlock and allegedly they're gonna make our lives easier., We're sold a dream where this, this cognitive load that we experience day-to-day professionally and in our personal life supposedly disappears. But it hasn't. I don't know about you, but I feel like I'm doing more work than ever. I'm orchestrating all of these parallel tasks, and I'm exhausted at the end of the day. And I-

Richard Gillis, Unofficial Partner

say that 'cause I have been a bit of a, over the last probably three or four years, slightly obsessed with note-taking apps. So things like Obsidian and Notion you know, variations of that. And the promise is the same, is that I- construct a second brain, a Gillis second brain, if such a thing could even be imagined. And there was-- You then get to things like Zettelkasten and Luhmann, who is a sort of incredibly prolific writer in the, in the sort of '30s, sociologist, but he had this method and everyone is then saying, "Oh, you should do this. You should get the stuff out of your head and put it somewhere." And it's like that sort of Harry Potter thing where you're taking stuff out of my head, and the promise is really alluring. I haven't got to the point, and I've constructed all sorts of nonsense within Obsidian, but it doesn't-- Like, you're, you're right. It doesn't feel like I'm any sort of closer to the nirvana of freedom that this is promising

Andy Shora, TFG Labs

Well, let's-- firstly, I'm glad I'm not your note-taking assistant, Richard. You're probably more organized than me. My notes exist on, uh, uh, my-- an app on my phone, uh, Gmail drafts, conversation with Slackbot, and even just on pen and paper here. And if you revisit notes that you made a few months ago, you probably wouldn't agree with a lot of them. So when you see demos that supposedly can ingest all of your structured notes that are all a- all available digitally within reach, uh, and make sense and think for you a lot of, a lot of thoughts I had even last week are not relevant anymore. And a lot of these apps don't take into account the reality that people change their, their thinking. Information is-- can be proved false. And so the most recent notes you made are probably the most relevant. I might be thinking of a note-taking app right now based on recency that where, where old notes kind of erode and become less relevant. all of these products are essentially selling us a more organized life that are allegedly easy to set up, that make our output more effective.

Richard Gillis, Unofficial Partner

It is, and, and it's, the base-- The, the fundamental thing that they're selling is, I forget, we all forget 95% of what we read and/or listen to or watch. And so the dream of capturing more of that makes me more of an intelligent person. I can draw on different sources at different times. The other bit is to try and present information when I need it. So it's trying to second-guess when the, the sort of behavioral bit comes in, where I say, "Right, okay, well I'm gonna take this note down now. Andy said something interesting. I've written that down, and what do I do?" You know, when am I ever gonna use that, and when am I gonna do that? So now obviously as a journalist, there is an output of writing, and you do podcasts, and you start to then say, "Right, okay, I can..." essentially the promise is happiness when you

Andy Shora, TFG Labs

Yeah

Richard Gillis, Unofficial Partner

to it, because there's a, the trying to get to a state of, I think, productivity, and the productivity evangelists and, you know, you can find them all over YouTube, they're essentially promising a version of happiness, and it's do this and you will be liberated. And I think when I look at the Google I/O I think within it There's a part of it that's going on. And you mentioned the phrase cognitive load, which again, is quite a useful one to, for us to keep hold of. So people who are listening to this podcast and this series, what we're hoping for is to sort of lighten their cognitive load. It's not the sexiest line on a, on a podcast, but essentially that's probably what we're trying to do, isn't it? so with that as context the Google announcement, the raft of changes, you know, Omni, Spark, the YouTube stuff, is there something in there that is sufficiently important that we just pause and say, "Yeah, okay, this has happened. This is directional, and other things will flow from that." Is it, is it gonna change people's behavior who are making things? Which I think is a... get to why do I care, it's, audience of this podcast, a lot of people are running businesses and/or working within businesses that are in sport or adjacent to sport. So one of the questions is always, do I need to care about this? Do I need to care about it now? And is this good news or bad news? There's a very fundamental sort of quick lens, and then the rest, if it is important, we la- we say, "Right, okay, we're gonna keep an eye on this and come back for it later." But just talk to me about Omni, Spark, and, and just within the announcements that, uh, that Google made, why are people making a fuss of this? What's, what's changed?

Andy Shora, TFG Labs

So let, let's ignore Omni, make it easy. Newer models, allegedly faster or cheaper. It's always gonna happen. So Spark is the big one. Google are bringing agents to search and, and you're right to think, okay, what does that mean for me? Does that change the output that I'm receiving? Does it change my behavior and how I interact with my Google app? So as you know, Google is a search business, and they, they make the majority of their revenue from advertising, uh, showing results when people search. And their objective is to obviously preserve that revenue stream, which is becoming more and more at risk now. They've noticed obviously, that people are getting answers from LLMs.

Richard Gillis, Unofficial Partner

Yeah

Andy Shora, TFG Labs

but they, they've also noticed that people expect technology to do more for them, and ideally do more in the background that doesn't require synchronous interaction. So they showed a few demos of, of, of setting up tasks that can be run on schedules, things like checking the latest news, letting me know if there's anything relevant come up, managing leads in a pipeline, kind of stuff that we do at TFG. And they've set up um, agents that kind of sit in this layer behind the search box where you can ask an assistant to perform tasks for you, either in response to some trigger happening. Let's say there's a big announcement about a stock that I hold. I might wanna perform an action in response to that. Or I might want it to... The classic demo from, from the Bay Area is organize a trip for me and my family with a tiny budget of only $10,000. And so does my behavior change? Well, it will if all of this works. People don't know that until they get to play around with the technology

Richard Gillis, Unofficial Partner

So there's a, there's two bits to this. Is that there's the sort of-- So Google, as everyone is where we've spent the last 20 years with the internet. So I, I ask it a question, a search query, and it comes back with a, a page of stuff. I very rarely go beyond the first page. So the business question that this poses is how do I get onto the front page? Does the front page exist in the same way? If I am working in sport, if I work for Tottenham Hotspur Football Club, or I work for, an agency, what does this mean for me and my clients? So when we did the thing at Omnicom at, uh, Fuse, Sean Betts talked about this, you know, really interestingly about, well, what the clients want now, and frankly, they don't-- they're worried that they're gonna disappear. So the whole infrastructure of the internet is based on search engine optimization. Is that still relevant? And because I'm not now, you know, if, if I'm sending out agents to find out football scores, or if I'm going and searching Premier League highlights on YouTube, now I'm just asking my agent in Claude or in Google Gemini to do that, a different relationship. So the back end of it feels in flux. Is that true?

Andy Shora, TFG Labs

Yeah, I think that's true. I mean, I personally believe that the, the first page of search results doesn't really affect companies anymore. If you're a company who has kind of neglected their website but are still growing in revenue, then clearly it's not too important. W-we're in a position right now where if you are a publisher of information and that is how you gain revenue you're getting your business ready for the agentic web. You're becoming discoverable to agent-based searches. It's a bit like if you've, if you've worked in the web development industry there was a big focus on accessibility for the reason that people would-- some people would need screen readers to read the screen if they had a visual impairment, for example. There were standards associated with publishing anything online such that machines could be able to read the structure and the content, uh, of your webpage. And that is similar to what's happening right now. Even the MasterCard CEO's just released a product that lets agents conduct transactions. Even though that's not normal human behavior right now, he can see that's, that's the way the world is going. And I'm the same as you, Richard. Like, the interface with the internet in my world is probably through a mobile application. It's through Claude Voice, or it's through Gemini Voice, and I'm asking it to search the internet. I don't ever see the page of search results. I probably don't even know how it's determining those search results if there's an element of personalization attached. But what I do know is Google's idea of me and what they've mapped out, the, the, the things that I care about, the things that I do, can be wildly different based on whether I'm working professionally or in a-- or in my personal life. And I'll give you an example. On Google Maps, you've probably starred a load of locations across London. Some of them are your favorite restaurants. Some of them are just places you met somebody once and you starred it so you could get there. Well, Google doesn't have that context. They might think that, you know, you love a particular coffee shop when actually you just had an interview with somebody there and it was a good place to work. So every company right now, every big tech company is kind of searching out for that context that can make the product layer more useful for the users

Richard Gillis, Unofficial Partner

Okay. So the context layer, How do they do that? How do they understand context?

Andy Shora, TFG Labs

So if level zero of, of, of what a technology company needs to provide a service, I'm an engineer, so things, things start at zero. Just a description of the real world, how humans operate, and the fact that if I'm visiting London, I might, you know, need to go and eat lunch, need a way to get there, for example. And then you have a layer of, okay, there's an introduction of personalization, and it might be high-level stuff like my inferred age, maybe my gender. There may be things that Google know about me that could infer how much I own, earn or what, what kind of job I have. And, and all of that context injected into a task may produce different results. Now, we can go beyond that and, you know, we can get really "Black Mirror" about this if you like, and you can imagine a company like Google would know every single search query that you've ever entered, and it would even have a temporal context, so it would know how that behavior has changed over time. And it might see, okay, I previously liked Italian food. Suddenly I've become lactose intolerant. Suddenly I've had a baby. You know, that kind of stuff is scary, but ultimately can lead to better products and services

Richard Gillis, Unofficial Partner

What does temporal mean in that sense?

Andy Shora, TFG Labs

So a time-based context

Richard Gillis, Unofficial Partner

Okay. Part of the game that everyone is playing is, is, fan... So when you look-- when you put fans and that, the fan-sport club relationship into this, or the league or a, and a major event, you start to then say, right, okay, is something changing here? Is this about discovery? sport presumably does well in a sort of pre-discovery phase where people are sort of entering for information rather than to the internet to, to find out what, you know, sport to enjoy. There is something that, is happening out, away from the screen. So I'm wondering again, being the skeptic in the conversation, I'm wondering how this plays in the game of collecting fans' numbers and the, you know, evidencing popularity of sports, which is what the sponsorship economy is based on. You need a big number to sell a, you know, a package, how that bit of the equation is gonna change. So when in an agentic world, it's not a fan engaging with content, it's an agent of how we work through that and what that actually means. Because again, that feels like a thread here in terms of how the sponsorship measurement industry is gonna respond to the Google announcements, because it sh- it feels like there's a shift. This feels like there's something going on within, and Google is, has been how we search. So how we connect with a star and what they then now do, because again, I am not connecting. I, it's the agent that is connecting. So it's an agentic world. It's not me having the emotional relationship

Andy Shora, TFG Labs

Well, I think agents are quite a ro- a robotic way to interact with sports information. So if, if you wanted to buy a football shirt, a Messi football shirt, for example, you, you'd have no qualms about using an agent to do that, to act on your behalf, to hunt down the best price and to get, uh, an original shirt, maybe a signed shirt delivered to you. So agents are useful in the context of things like commerce, hunting down information, performing all the monotonous tasks that you don't need to. But when it, when it comes to actually interacting with players, going and experiencing sport, agents have less of a role to play for sure

Richard Gillis, Unofficial Partner

Okay. Right. Let's talk about this Ask YouTube element. What does it do, first of all?

Andy Shora, TFG Labs

So Ask YouTube allows you to apparently get answers out of videos instead of watching the videos

Richard Gillis, Unofficial Partner

So from within the video itself, rather than just, "Here's a film you should watch," "Here is the specific segment you should watch."

Andy Shora, TFG Labs

Yes, exactly. And, and perhaps you even don't need to watch any video content. It's essentially Google realizing they're sitting on an absolute goldmine of content that people are watching less and less, and really people are searching for answers in the YouTube search box rather than wanting to watch a video

Richard Gillis, Unofficial Partner

So A question that we talked about at the event, there is who in the sports organization owns the relationship with Google is a question, in terms of whether it's a commercial relationship and what actually that looks like now. And if you are someone who is selling sponsorship for a team or a league, what does it mean to have a, have a partnership with one of the sort of foundational models now? But when you s- sort of drill down into YouTube, YouTube, what have they got already? So they've got billions and billions of football clips and highlights packages and sports sort of stuff that is on there. I'm just wondering how this will shape what they do and how we then interact with YouTube. So if everyone is saying, "Right, okay, I just... I'm gonna put a voice command in and go to Tottenham 1995's match," away I go, what that means for all the parties concerned. What do you think?

Andy Shora, TFG Labs

Well, firstly, let's, let's just talk about how this works and, and what it means. This is not something that's searching a transcript of a video. So video models have existed for a while now. They've not been widely publicized because people have been, been trying to prove that this can actually add value to somebody's life. So if, if you imagine I think we're all familiar with the fact that large language models are trained on text. Now, you can ingest a video file, and you could encode things inside the frame of a video in exactly the same way. So if you imagine there might be a silent video of a football match, if you were to ingest a million different football matches, you could attach meaning to what these things are moving around the screen. And a model could understand that when a ball crosses this particular line and goes in this, this white box over here, that the score increases by one, and it could understand that when someone elbows somebody else in the face, hopefully, the referee's gonna show a card. And they can arrange all of this information in a way that can-- it can be searched. And when-- each of those frames are indexed. They're obviously indexed with, a timestamp s- in the associated video, and probably some notes about how high quality the video was, the production value attached to it. So soon you're gonna be able to ask, in YouTube, okay, which was the greatest, World Cup free kick of all time? And it's gonna be very quickly able to not just return you, uh, a list of YouTube videos to watch and compilations that match the text term in their title to my search query, but it's gonna be, gonna be able to suggest parts of videos and potentially even splice together my own compilation, maybe even based on my own favorite players and the team I support in response to my query. So we're talking about dynamic content creation powered by AI.

Richard Gillis, Unofficial Partner

Wow. So that's go- I mean, how far are we from that? 'Cause that feels, significant

Andy Shora, TFG Labs

I think it's all possible using the technologies today. It just depends on the associated effort. And what we're seeing right now is unfortunately companies that do pursue missions like this, where they are building on top of Google services it's a huge risk because Google could just, you know, suddenly devote a team to that exact same task and, and, and produce the same result and just eat your company.

Richard Gillis, Unofficial Partner

how do you deal with that? Again, like that's a really, uh, I think you're getting to a really sort of fundamental point there, which is again, the question of building something on someone else's land, you know. And it's, it's still Google's world. They've just shifted goalposts, and we're gonna have to respond in some way. We're gonna get better at some things. We're gonna lose other things. There's gonna be trade-offs. But fundamentally, it makes everyone's business less secure, isn't it? I mean, that's essentially what-- As the technology, we said at the beginning that these changes and, the Google announcement, then a Claude announcement, then a chat announcement, these things are all shifting, the question then gets to pick a So if you're a company, if you're a CEO, do you say, "Right, okay, do we need to pick a horse here? Is this something that w- w- we make a decision?" 'Cause it's gonna be very difficult to be able to do that with just, as you said at the beginning, just the fire hose of new stuff, which is almost purposely They're keeping this race going for lots of different reasons, mainly financial bubbles, all of the, you know, noises off that are within the AI question. What we're trying to get to is within all of that noise, actually, what sort of decisions now are gonna have to be made? So would you advise picking a horse at this point or do you just say, "Right, no, you're gonna have to around a bit"?

Andy Shora, TFG Labs

I think it's quite easy to change the, the provider of technologies you're using. I think the best advice I can give is to, to get your house in order, to organize your data and to structure it in a way that any of these tools could easily understand what you do and how you work. Now

Richard Gillis, Unofficial Partner

again, just sorry Andy, just so I understand. So you've got, when I work with in Claude, it is now, you're saving stuff in just text documents that you're feeding it and pointing it towards, but you are owning text documents essentially. So you, that's you're saying, a, a bigger scale obviously, but there needs to be home that isn't within any of the foundational models that you can then just say, "Right, okay, Claude's not working anymore. I'm gonna shove over to Gemini." But you're still working from the same assumptions and the knowledge base that you've created

Andy Shora, TFG Labs

Yes, exactly. our company stores documents on Google Drive, and we're, we're constantly reorganizing this in a way that both people and, you know, agents can find the information they need. And that, and that is not just um, structuring things that, that mirror how we work as a business and what our hierarchy looks like, but it's archiving old content. It's tagging files when they're no longer relevant. And the beauty is, if I wanted to switch from Gemini to Claude, I can ask Gemini to make that transition really easy. Those documents will always exist, and there's always gonna be a human effort to organize them, and there's gonna be lots of different opinions on how to organize them. And, and there's gonna be some gold within those documents that a human would be able to point out that a machine would probably struggle with without the context. So organizing your layer of data is critical right now. And to your other point, Richard, I think every company right now is questioning where their moat lies and, and how easy it is for a, for a big tech company that you are using day-to-day, how easy it is for them to replicate your company and do what, do what you do. But the truth is everybody knows the nuances of, what they do and how much isn't digitized, and just how fundamental in sports human relationships are

Richard Gillis, Unofficial Partner

It's sort of a version of, know, we're training, the models to make ourselves obsolete in a way, in that, that we're, we're giving over all of this in- precious information. are taking that information, offering a service initially of, you know, the, the interface of Claude. But it's a bit like Amazon just create new better versions of the product that you sell on Amazon. They will copy produce their own and undercut you. So it's sort of almost like you are training the, the model to make you obsolete if you're not careful. And I think there's a sort of trap there. It's an obvious trap, but on an individual basis, you think, "Okay, who cares?" But actually on an organizational basis, it becomes a very significant sort of factor. I think, y- you know, again, there's a a load in the Google I/O announcement. But really what we're saying is that it's a shifting marketplace, and just be careful which model and just take... It, it's a sort of encouragement to take greater control, isn't it? Rather than just hand control over to the models

Andy Shora, TFG Labs

Well, it-- if you were to fully document what you do day-to-day in your digital world I, I doubt Google is gonna try and replicate your business. And if they do, they're gonna try and assign some project manager somewhere to do your business. They're not gonna do it very well. I, I, I think there's very low risk. I just saw a video of a robot sorting packages in a factory, just simply turning packages upright so the next machine could read the label. And that's the kind of work that is going to be automated that workers are already wearing cameras that are training models, and big tech companies are very transparent about what they are doing. It was quite funny actually, because at, at one point the robot starts scratching its head, adjusting an invisible headset, and even,

Richard Gillis, Unofficial Partner

Cups of

Andy Shora, TFG Labs

started to ride a motorbike during a period of inactivity, which are obviously hallucinations which come from the training. You might, you might find it go and visit the gents for apparently no reason

Richard Gillis, Unofficial Partner

Right. Let's move on to story two, 'cause I think it sort of, links there's a, a sort of cluster of stories landed over the last few weeks, which taken together look like sort of more than coincidence. So one is Microsoft. So Microsoft canceled its internal Claude code licenses, not because the tool didn't work, because token-based billing made the cost untenable, even for a company with effectively unlimited cloud capacity. Uber's CTO sent an inter-internal memo confirming the company had burned through its entire 26 AI budget in four months. American AI software prices jumped 20 to 37% over the past six months. which is owned by Microsoft, is rolling flat rate plans for usage-based billing across the product line. Anthropic, OpenAI, and Google have all raised effective prices in the last half year. are we at the end of what you might call is the AI subsidy era, and is the bill now landing on people's desks? Is that what's happening here?

Andy Shora, TFG Labs

Briefly, I think. Well, well, looks like Microsoft canceled their, their Claude Code licenses because they're, they're approaching the end of the financial year and they, they happen to have internal competing products, uh, Copilot being the big one that, you know, it's not a great advert for Copilot, the fact that Microsoft gave access to Claude Code to everybody in the organization, and I mean everybody has got it. So it's not surprising to hear that people are using it ineffectively. Now, like Microsoft's full of intelligent people, but I would not be surprised in the slightest if there was a simple message sent out by the CEO saying, "Use AI."

Richard Gillis, Unofficial Partner

What do you think the pricing model... So for a tech company in sport, so that, you know, again, there's a, it's a burgeoning space again, if you look at it through the sort of C-CEO lens or the CFO lens, So SaaS era pricing, what was that? That was sort of you're selling seats almost, aren't you? something different here happening, think? and the cost, I- it could get to astronomical levels, it's turning the sort of model assumptions on their head, presumably

Andy Shora, TFG Labs

I think right now big tech companies are thriving in a world where they have seat-based prices. But really what we're discovering is that the productivity gains we're seeing in our company aren't necessarily associated with the number of seats we have especially when we talk about agentic systems being able to do the work of many people. what's also apparent and not widely publicized for obvious reasons, is that a lot of the work that people are relying on expensive models to do can actually be done by open source models on your device, even without technical chops. You know, you can install infrastructure on any Apple silicon, which can do local inference. Um, One thing that kind slid past in the news recently was somebody discovered Google Chrome actually ships a four gigabyte LLM to, every single person's computer that had an internet connection. It's probably buried in the release notes somewhere. Now, what the plan was for that, according to Google, was to run some kind of cybersecurity scans to help you stay protected. But who knows? Google and Apple might have a relationship that becomes very important soon that can do local inference. right now I can probably perform 90% of the tasks that I have day-to-day without an internet connection, just running, uh, a model locally on my machine. So that would, that would throw the business model of these companies upside down, and it's also the challenge they're facing from Chinese open source models, which are very quickly catching up, and they're actually offering pretty much the same services for a 10th, sometimes a 50th of the price.

Richard Gillis, Unofficial Partner

So there's gonna be a response a local level to, okay, we're gonna find these things cheaper. The pricing environment is gonna set a different set of ex- you know, incentives and they're gonna res- respond to it. So there's cheaper stuff you have to shop around. There's a bit of that in the message. The other bit that I when I talked to Craig Hepburn about this, about the sort of in-housing, so the, the big thread, if you like, and we did a thing on the threat to the sports agency consultancy sector that, you know, they can be wiped out by, you know, two smart young things and an AI model. That is in my mind thinking, actually, that's not such an easy solution as people might think. So the cost of these things is gonna go up. So if I say, right, I don't need third-party agency support now, if I'm a big rights holder, it in-house. also taking in the future volatility of the price change within that. At the moment, that sits, that risk sits with the third-party vendor, doesn't it? And now it's actually, if you're, if you're cutting that off to make a cost cutting, that might be a short-term solution

Andy Shora, TFG Labs

Yep, absolutely. And you're taking on all the, the liability that your, your vendor previously had for the delivery of, of the work. And, and you're also taking on the risk that these services provided by Google, Anthropic are not gonna change. Unfortunately, over what, what we've seen over the last six months, we- we're hearing that models are improving, getting better and better. But on the down low, we're experiencing regressions, and those regressions, changes in behavior that are negative changes, sometimes come from the available compute that the big tech com- companies have at that current time.

Richard Gillis, Unofficial Partner

Sorry

Andy Shora, TFG Labs

So a negative change in behavior, the introduction of a bug or an error that didn't exist before, like reverting to a previous state

Richard Gillis, Unofficial Partner

why is that happening?

Andy Shora, TFG Labs

So Anthropic recently introduced something called adaptive thinking. And, and what that meant was you could not control how many tokens were devoted to servicing your request in the background. And those tokens used for thinking, you can think of them as they're the tokens that form the plan for how to respond to your request. And that adaptive thinking was determined by the compute that the data center had at that time. So Anthropic were basically saying, "We previously had a contract with you where the results you were getting were quite deterministic. The same input would generate the same output most of the time." Now they're saying, "Hey, if, if we've got fresh water in our data center and not m- not too many people are using the service, you're gonna get a good response. But we reserve the right to adjust the amount of resources that are dedicated to servicing your request."

Richard Gillis, Unofficial Partner

So something like, again, on a mi- in a, on a sort of personal level just to, so I get my head around it. I overuse Opus in Claude when I should be using a much lighter touch, you know, far fewer things far less compute lots of different reasons, not just computing for the environment and, you know, everything. Message is quite an interesting one from their point of view to try and communicate to the, to the market, isn't it? Because it's saying, Calm down, don't overuse this stuff." But part of the fun of these things is actually the use and the, the extrapolations and, and the sort of how far you can get from the first question, how quickly you can get into different areas, that bit of it, and trying to work out... So what you're saying, that sort of adaptive thinking is that I don't need to make that decision, that the, the thing itself will make it, make that decision for me.

Andy Shora, TFG Labs

Exactly. And what, what, you know, giving out a message that would say-- So what we're talking about is a thing called uh, dynamic model selection. So imagine you had a router, so you had, you had somebody to decide which model should be used to service your request based on the complexity. And, and right now, we're just all using the latest, most expensive model, just like Anthropic or Google want us to do, by the way. If they gave out advice that contradicted that, they would make a lot less money. But if they were to think long-term about this, we want companies to adopt AI and build their infrastructure on top of our tools. They, they should give out the advice that, that you should be careful about the model you're using, because people ultimately want to see that the costs don't run too high and, and, and that the actual benefits outweigh the costs.

Richard Gillis, Unofficial Partner

So just thinking out loud for a moment, if-- how you would describe it, is it cost per inference? Is that what we're... Is that... So if you're looking at a v- you know, the, the, some of the things in sport, so if you look at the sort of betting market, for example, say, right, there, it's very compute intensive in terms of it's high frequency, very low margin on each individual thing. Now, if you are looking at it from a compute intensive sort of angle, cost per inference, if that goes up even a few percentage points, if you're a low margin business that is you know, is dependent on high volume, low margin, that's gonna wipe you out. You know, if it goes, if the, if you follow those numbers that we talked about at the beginning about the cost of compute going up, it's been artificially reduced up till now to just get people on board. Once they're on board, the prices start to go up. If you are in that world, and a lot of people are, particularly in that sort of data space, gonna be really... That's not just a, a cost management question. That's almost existential, isn't it?

Andy Shora, TFG Labs

Yeah. So, I mean, cost per token is usually the, the unit we use, and you can think of a token as a, a word. And, and, and you pay different costs based on the input, so the, the words you type in and the documents you upload, and the output, the response you get back, whether it's a text or an image, et cetera. And a lot of people are using LLMs unnecessarily right now to perform things like computational logic and, everyone knows what software is. Previously,, the cost per line of code executed is pretty much negligible. You end up with a quite a big chunky cost that's associated with compute, but that compute is not really, proportional to, to the number of like bets that are made by a particular customer. Or, you know, we, we find people that can architect systems after decades of experience that run efficiently, if you were to add, uh, LLM inference in at lots of different points in a workflow, you'd find that your costs have just exploded and can be potentially very difficult to trace why that happened other than someone pushed you to use an AI tool.

Richard Gillis, Unofficial Partner

So Bryson DeChambeau, obviously famous golfer, and He was pondering about YouTube and where he's been incredibly successful. He's building his own personal brand via his YouTube channel. He's got millions of followers across the major social media channels, and he's making a lot of money on YouTube. And he sort of suggested, probably quite playfully but 'cause he's in sort of contract re- negotiation period with his, with LIV Golf, whether or not he would then sort of... He was balancing being a golfer with being a athlete creator YouTuber. And it made me wonder about what that world is gonna look like and how it is gonna be impacted by this conversation about the AI conversation. B- And again, we get a lot of people on here from sports production companies, and again, it's a sort of, it's the thing that they talk about first because for many reasons, it's changing what they do almost on a weekly basis. There's a sort of cost but also an efficiency, and we see it even on a micro level here at Unofficial Partner. The level of AI sort of use and, you know, in terms of editing and cloud production and all the rest of it, is it just changes on a weekly basis almost. So it's, it's an interesting for lots of people who work in and around sport 'cause a lot of people are in that industry in terms of the media thing, and you've got the big thread of, or, you know, two big threads, which is sports organization as publisher, but you've also got the obvious athlete creator thread as well. So let's talk about this for a minute. So where, when you look at this world, what do you see in terms of the, the immediate impact of AI

Andy Shora, TFG Labs

With regards to AI, not many people know he's, he's been on the AI train for years now. He he started using Sportsbox, an AI coaching start-startup, which does 3D motion analysis, uh, back in 2024, and then, and le- then led an eight-figure acquisition of the company,

Richard Gillis, Unofficial Partner

What's the company

Andy Shora, TFG Labs

and Sportsbox AI.

Richard Gillis, Unofficial Partner

AI

Andy Shora, TFG Labs

So another thing we do know is the PGA Tour have famously been quite restrictive on players' use of social media and, and a personality like Bryson certainly doesn't like being caged. And, and if, if, if the PGA Tour did want to unlock the full potential, the full value add that, that Bryson can bring to the game you know, they, they wanna give him more unrestricted use. And, and by his own admission, uh, in quotes, interviews he's given, he, he cares most about adding value through entertaining. N-note he didn't say winning, he said entertaining.

Richard Gillis, Unofficial Partner

Yeah, I guess the question the context of our conversation here is about the sort of collapse of cost or production cost that would then liberate wannabe Brysons. So Bryson is sort of top of the shop. He's done it. He's, you know, it's, it's a-- He's got a lot of money. He's spent a lot of money on production. It looks fantastic. It's, you know, really is state-of-the-art, and he's done brilliantly well. So he's a sort of, he is the role model for lots of other sportspeople. are all sorts of second-level questions that you're exactly right about the PGA Tour, and they're... use them as a proxy for every sports governing body and rights holder in the world in terms of how they, the old question of how they calibrate and, you know, make space for someone like Bryson whilst also selling TV rights that are exclusive to and, you know, trying to work through that puzzle, which is a sort of 20-year story almost. And I wonder about, we then go back to story one, which is about the Google announcement. So within, even within that, there was a whole load of things that suggested that if I am, uh, to t- you know, make the most of the sort of my popularity as an athlete, sports person, there is the tools available, and obviously they're in the market. There's loads of agency offerings who want to take on famous people. Which would turn content into, you know, usable content that is then distributed. So there's all sorts of organizations and companies and vendors in the, in the plumbing, in the supply chain. I think what's interesting here is whether or not you get to a point where, okay, I sign up with Gemini, Omni with AI video baked into YouTube and all of the, the tricks that are now available across the piece, whether or not I can get there on my own without actually having the sort of having to pay a, a vendor or have my management company pay a third-party vendor. It's a example of maybe the further collapse of cost, but also I wonder what that means in terms of sort of medium-term impacts. But what do you think?

Andy Shora, TFG Labs

I, I sense that Bryson will always rely on a small production team to do this work, and the, the, the costs may decrease, but that's-- it's probably negligible. But what I, what I do think is i-is this is more relevant to growing the top line and how easy that is for Bryson. Let's say he could probably, using the tools today, launch a new clothing line if he wanted to and, and very quickly produce images of him wearing or v-even videos that look realistic of him modeling the clothes. Uh, or he could launch a new application, you know, that seemingly has him interacting with something apparently real in the, in the real world. And so the possibilities in terms of entering new ventures, producing new types of content without occupying the time that a professional athlete needs to devote to those kind of ventures, that's the revolutionary change we're looking at here.

Richard Gillis, Unofficial Partner

Yeah. you talk to an athlete, they always say, "Look, I'm an athlete. It's really hard being a top athlete I need to train loads, and I haven't got time and I don't have the expertise, and I don't..." You know, it's a different job, and these people are full-time working on this stuff, and that skill shouldn't be underestimated, et cetera, et cetera. whether or not that will change because of this or just, you know, it makes the, the actual, the opportunity is in the, the service sector that, clusters around that. The other bit is that you get to a stage where, again, it's an extension of an existing trend where you sort of disintermediation of not just, broadcaster streaming or to, to creators, but it's also leagues themselves being disintermediated by their own star athletes. So you've got this sort of rivalry that, that sits within the league Let's finish off. are Loads of people in this world, I wanna talk about of interest that we should keep an eye on and learn from. And we'll go around as part of the series and invite some people on who, you know, have got interesting things to say about AI in sport particularly. But there's a guy, and I can never pronounce it. Is it Carpathi or Carpathi?

Andy Shora, TFG Labs

Yeah, Andrea Karpathy

Richard Gillis, Unofficial Partner

Carpathi, who I find him really interesting to listen to, and he's someone that I think, "Okay, if he's saying something, I, I'll, I'll click into this one." Who's on your sort of list of interesting people? just give me one and we can start to build one

Andy Shora, TFG Labs

So let's take, uh, Yann LeCun. He was one of the godfathers of AI. He's Turing Award winner, previously chief AI scientist at Meta. He's also a professor of computer science. You know, some of these people appear to have had about four different careers before they started at, at their current venture. But Yann is skeptical of LLMs and, and he started a company with the inherent belief that current AI models do not have a true understanding of cause and effect and are, and are unsuitable to operate in the modern world

Richard Gillis, Unofficial Partner

Wow. So where can we find his stuff? What I like about these people is that they've got PhDs in, in, we're talking about AI now, and they've been thinking about it for 30, 40 years. It's, you know, it's just, it's, uh... And there's, there's something here that's quite funny about the sort of marketing of AI as a, as a brand, isn't it? You know, in terms of where we are now and the models and the rest of it. But Where would the obvious place to find him? We'll, we'll put a link in the show notes to him

Andy Shora, TFG Labs

I'd recommend going on YouTube and, and looking at s- some of his interviews. You know, he's not, he's not publishing TikToks every day from his desk, unfortunately. He, he's a bit bit, bit too high level for that. But, but if, if you like, Richard, I can, I can talk you through some of the reasons, like quite legit reasons I think that Jan is right in his skepticism of AI

Richard Gillis, Unofficial Partner

Well, we'll get onto that in, in a future, episode. We'll, we'll

Andy Shora, TFG Labs

Sure.

Richard Gillis, Unofficial Partner

we'll have an AI skepticism episode. Right. Listen, thank you. Really enjoyed that. Really enjoyed the conversation. And to people listening, I guess, what the message would be. We're really interested in, this is being done in a, a spirit of collaboration, but also just moving forward. We don't have all the answers. We're just looking for interesting questions and question areas. So if people listening wanna get involved and, uh, send us questions, voice notes, all of that is possible via the Unofficial Partner Substack newsletter. So give me a shout. In the meantime, Andy Shora, TFG Labs, thank you very much for your time

Andy Shora, TFG Labs

Thank you