The ‘Anti-Cloud Guy’ Joins Shopify’s Board

Welcome to Friday, futurists.

Are you exhausted this week? No? Good, there’s lots to cover.

News was dominated by ragebait discourse, but what we should be talking about  Shopify anointing the "anti-cloud guy" to its board. In today’s newsletter (and the podcast) we break down the pendulum of tech’s infrastructure swinging back toward local computing and open-source.

Plus we’ll talk about the scary-prescient timing with the Commerce Department’s moves in AI regulation and CHIPS Act implementation under potential new leadership.

The ‘Anti-Cloud Guy’ Joins Shopify’s Board

This week, Shopify appointed David Heinemeier Hansson (DHH) to its board of directors in a surprising and inevitable move. The appointment comes at a fascinating inflection point in the technology industry's relationship with cloud computing and open-source software.

DHH is the latest addition to a board in transition. In June, Bret Taylor, a Google alum and the Board Chair at OpenAI left the Shopify board after a brief six-month stint; he was later replaced by Kevin Scott, Microsoft’s CTO, and EVP of AI. 

For those unfamiliar with DHH’s bona fides, the creator of Ruby on Rails and CTO of 37signals has been a vocal critic of the "cloud by default" mindset that has dominated tech for the past decade. His company's high-profile "repatriation" of services from cloud providers back to on-premise infrastructure sparked industry-wide discussions about the true costs and benefits of cloud computing. “Do your own math,” says DHH.

The timing couldn't be more intriguing—you can do nearly as much today locally as you could in the cloud in 2018. Tools have evolved to use phenomenal compute that we have access to with the new generation of 3nm chips; like the ones in your iPhone or Macbook. Big data loads don’t require giant compute with tools like Duckdb. Small AI workloads can be done locally with Llama Nano.

As Mother Duck's Jacob Matson explained in today's Future Commerce podcast, the laptop on your desk has fundamentally different capabilities than servers from the cloud computing boom: "The CPU inside your MacBook today is about as fast as a CPU from 2005. The difference is you have 14 or 16 cores on your computer instead of 1." This architectural shift, combined with Matson's observation that "hardware is now scaling faster than we can create data," enables simpler, more efficient architectures that can process massive amounts of data on single nodes, challenging the distributed cloud paradigm that has dominated the last decade.

But perhaps the most compelling aspect of this appointment is what it signals about the future of commerce infrastructure in the age of AI.

Open-source projects are positioned to thrive in the era of large language models as their publicly accessible codebases and documentation become invaluable training data. As Matson observed, "Because we have 50 years of training data for SQL, it also means that from an AI perspective, I would bet heavily on SQL [being] the connective tissue." The same principle applies broadly – open technologies with rich, public documentation are becoming more valuable as AI tools become more sophisticated.

This shift comes at a pivotal moment in tech governance. As Howard Lutnick steps into consideration for Commerce Secretary, he stands to inherit Gina Raimondo's ambitious AI Safety Institute initiative at the Department of Commerce. The convergence of CHIPS Act implementation, NIST standards, and AI regulation under the Trump 47 Department of Commerce could accelerate the industry's evolution toward more controlled, transparent computing paradigms – making DHH's open-source advocacy remarkably prescient. Will he bring that prescience to the Shopify board? Time will tell.

Open-source/on-premise LLMs vs. the Cloud Services will be the defining narrative hurdle both for the consumer and for enterprises concerned about trade secrets.

This could mean more flexibility, better performance, and potentially lower costs for merchants and developers. More importantly, it could mean the ability to truly differentiate their offerings instead of being constrained by the limitations of their SaaS platforms.

The renaissance of open-source, which we have been predicting since 2022, will be catalyzed by AI and evolving hardware capabilities.

This isn’t a purely technical shift; it’s a cultural one. 

— Phillip

P.S. Nerd out with us in Jacob Matson’s highly-technical interview on this week’s Future Commerce Podcast. Listen on Apple or Spotify. 

‍P.P.S. For your weekend ‘edutainment,’ catch up on the CAPI shifts happening in analytics with our three-part series. Step by Step Season 14 is here, and we’re taking you from zero-to-hero with server side analytics. Queue up the playlist for your Turkey Day festivities.