SXSW turns 40 this year. For anyone unfamiliar, this is the conference where technology, culture and marketing collide. It runs across twelve tracks, attracts some of the world’s biggest names as speakers and draws tens of thousands of people to Austin, Texas, every March. If you work in brands, agencies, or media, the ideas that surface here tend to set the agenda for the year ahead, writes Paul Hewett, CEO of In Marketing We Trust.
Having had my boots on the ground for a few days now, I can say with confidence: You wouldn’t know it’s SXSW’s 40th from the energy on the ground.
There are a few reasons why. Firstly, the Austin Convention Centre has been completely demolished. Where the event hub used to be, there is now a construction site.
The effect is more than logistical. Austin Convention Centre essentially acted as a central gathering point, as a single place where the conference felt like itself. Now, sessions are scattered across disparate hotels and venues, the exhibition floor is a fraction of its former size and the big tech centrepieces from previous years (where you could see everything from human hologram installations to immersive brand experiences) have been replaced by a humanoid robot doing jujitsu.
The word I heard most from executives this week was “underwhelming”.
There are also fewer people, too. That may be because of economic pressure, global political unrest, or just the reality of a scaled-back programme. The Australian contingent in particular is noticeably thinner—aside from the three people from In Marketing We Trust, I’ve seen Mark Ritson speaking at Accenture’s office on Sunday and bumped into a handful of others.
This is a much smaller group than previous years. SXSW Sydney was cut entirely earlier this year, which makes being at the original feel more pointed.
And yet there are highlights. The Tech & AI track (sponsored by IBM) is strong, and the conversations happening inside sessions and in corridors have a different quality this year. The tone has shifted. Last year, AI was a productivity conversation. This year, it’s a reckoning. That thread will run through my coverage this week.
The internet after search
The session I’ll be thinking about longest was a fireside with Matthew Prince, CEO of Cloudflare. Prince handles 20 per cent of all internet traffic, so when he talks about what’s changing, the data is beneath him, not in front of him.
He thinks something profound shifted late last year. People are clicking fewer links, they trust AI answers more than they used to and that trust will only deepen as models improve. The downstream effect is that websites are haemorrhaging traffic, the value exchange between platforms and publishers is broken and nobody has a working replacement.
Prince was direct about Google being the villain in this story (and suggested they need to start paying for content before anyone else will).
I found his screwdriver analogy, which ran through the entire session, particularly apt. Cloudflare used to use manual screwdrivers. Now people have electric ones which are significantly more productive. Prince does not want his people screwing things in by hand and he does not think someone who is 10x more productive should be paid the same as someone who isn’t.
He made a comparison to Jeff Bezos’ famous two-pizza team concept, which is the idea that no team should be big enough that it would take more than two pizzas to feed them. In Prince’s opinion, the two-pizza team is now a two-slice team, indicating the power and productivity of capable people using AI.
As for the moment that matters most for marketers right now? Prince says it’s agentic commerce. He pointed out that three of the largest US retailers are taking completely divergent strategic positions on AI agents. Amazon is actively blocking them (and litigating), Walmart is opening the gates entirely and Target is somewhere in between (which Prince flagged as the weakest position).
Three companies, three opposing bets. That alone tells you how unusual the current moment is.
The broader shift
Prince wasn’t alone in this tone. Tristan Harris and Anthony Aguirre’s session on losing control of AI opened with the Alibaba incident that had been circulating in AI circles: during training, an Alibaba AI system autonomously created an external tunnel and began mining cryptocurrency. Not as an instructed task but as an emergent behaviour.
Their argument was blunt. AI companies are not building productivity tools—they are building labour replacements. The window for citizens to influence that trajectory is closing.
Across the past four days, there have been some clear themes. Budget pressure, the broken economics of the web and the displacement question kept surfacing in every corridor conversation. SXSW is still one enormous brand activation (I’ve seen HubSpot on the side of a skyscraper, movie adverts taking over entire hotels, Tesla Cybertrucks and Rivian running brand activations across the city), but the spend is visibly tighter and the mood is noticeably more serious than previous years.
More from the ground tomorrow.
