Our discussion follows Chatham House rules, allowing us to share what was discussed while keeping speaker identities confidential. The combination of 1) an abundance mindset to share these discussions and 2) a new phase of empty nesting where I have more time yielded The CEO Dinner substack. It’s thrilling to see the response. You can look forward to regular insights from our dinners as well as special pieces we’ve considered for years. With a meaningful audience, 2026 will be the right year to begin sharing more resources and frameworks with aspiring entrepreneurs! (...)
Outside AI darlings, Apple is ready to pop once they have something worth popping about. Netflix got shade for being a pick ‘em, not platform, story. Microsoft is well-positioned for the AI wildfire aftermath. Robinhood is ready to steal from Coinbase and give better experiences to their customers. Disrupting innovation still abounds at every level, especially with startups, and BigTech will need to stay on their toes with acquisitions being critical to stay relevant.
More broadly, we discussed how labor economics have as much focus today as during the Industrial Revolution - - virtual machines squeezing out human costs while improving quality. (Note: I’ve always enjoyed em dashes and am reclaiming them with the traditional typewriter solution, two hyphens.) (...)
Executive Summary
Eighteen technology leaders gathered for a long/short stock game that revealed five critical insights about market positioning and competitive strategy:
Eighteen technology leaders gathered for a long/short stock game that revealed five critical insights about market positioning and competitive strategy:
Waymo is Driving Away with Autonomous Transportation
A strong consensus long position emerged immediately: Waymo’s product superiority combines with devastating unit economics to create an unassailable moat. At $21 for rides that cost $105 in Uber Black, Waymo demonstrates 75-80% cost reduction by eliminating labor. Leaders who’ve experienced the product universally prefer it to human drivers, citing safety, consistency, and price. The training data advantage (millions of miles weekly) creates a flywheel competitors cannot match. Tesla’s full self-driving lags significantly (2x the accident rate in Austin), and the training data narrative is false. Tesla sends back only intervention data, not general mileage. Uber and Lyft face existential threat.
“The most shocking thing about Waymo isn’t that it drives itself. It’s the price. A 20-minute ride from the wharf to the Four Seasons that would have been $105 in Uber Black cost me just $21.” (...)
Nvidia’s Margin Structure Is Unsustainable
Multiple leaders questioned whether 80% margins on semiconductor infrastructure represent a durable advantage or a temporary bubble. The comparison to Cisco’s dot-com era dominance (expensive hardware with high margins that got commoditized rapidly) surfaced repeatedly. As AI models become capable of chip design at human expert levels (expected by decade’s end), the moat in chip design evaporates. Fabrication becomes the only remaining bottleneck, potentially benefiting TSMC while threatening Nvidia’s margin structure. The certainty: some player will find a way to attack that margin at the infrastructure layer.
“The amount of money going into depreciating hardware with high margins is the exact same story as Cisco. Somebody will find a way to eat that margin.”
Multiple leaders questioned whether 80% margins on semiconductor infrastructure represent a durable advantage or a temporary bubble. The comparison to Cisco’s dot-com era dominance (expensive hardware with high margins that got commoditized rapidly) surfaced repeatedly. As AI models become capable of chip design at human expert levels (expected by decade’s end), the moat in chip design evaporates. Fabrication becomes the only remaining bottleneck, potentially benefiting TSMC while threatening Nvidia’s margin structure. The certainty: some player will find a way to attack that margin at the infrastructure layer.
“The amount of money going into depreciating hardware with high margins is the exact same story as Cisco. Somebody will find a way to eat that margin.”
The Legal Tech Disruption Finally Arrives
Leaders identified a major shift in legal services: companies providing outcome-based pricing by owning law firms and powering them with AI platforms. Rather than helping law firms become more efficient (which creates perverse incentives against adoption), these platforms acquire 300-person firms, empower attorneys with AI tools, and offer flat-fee pricing to Fortune 500 companies, promising 90% cost reductions. The billable hour model prevents traditional law firms from capturing AI productivity gains, creating vulnerability to disruptors who align incentives properly.
“Traditional law firms are facing a conundrum. Why do you want to be 300% more efficient? Now you have to bill 3 times as many hours. AI-Native law firms like Eudia are killing the billable hour.”
Strategic Themes
Theme 1: The Labor Cost Revolution Creates Winner-Take-All Dynamics
The Problem: Labor represents 75-80% of costs in most service businesses, and AI’s ability to eliminate those costs is creating unprecedented pricing power for early adopters.
Waymo’s pricing advantage illustrates the magnitude of disruption. A $21 ride replacing a $105 Uber Black ride represents an 80% cost reduction, precisely the labor component eliminated by autonomy. We’re seeing order-of-magnitude transformation here. One leader observed: “75 to 80% of every business is labor. All these things are coming and taking labor out. Everything’s going to start just collapsing.”
The implications extend beyond transportation. Zipline’s drone delivery captures 3% of DoorDash’s business in Dallas alone by eliminating driver labor. Sierra and similar enterprise AI companies provide “shovel ready” customer service automation that companies can deploy immediately. Legal tech platforms cut costs 90% by eliminating attorney time on routine work.
First movers in labor automation can underprice incumbents so dramatically that competitive response becomes impossible. Uber cannot match Waymo’s $21 price point with human drivers. DoorDash cannot compete with drone delivery’s 15-minute coffee delivery economics. The winner-take-all dynamic isn’t about slightly better products but about fundamentally different cost structures.
The Insight: Labor cost elimination creates moats so deep that late followers cannot compete on price, quality, or experience simultaneously. The first company to achieve reliable automation in a category can price at levels that make the entire existing industry unprofitable while still maintaining healthy margins.
Leadership Implication: Identify your labor-intensive processes and attack them with extreme urgency. The first mover advantage in labor automation is more durable than typical technology advantages because it’s structural, not feature-based. Once a competitor eliminates 75% of costs, you cannot gradually catch up. You must completely rebuild your business model. In categories where automation is viable, assume you have 12-18 months before a competitor makes your entire cost structure obsolete.
by Dion Lim, CEO Dinner Insights | Read more:
Image: Christian Waske on Unsplash[ed. See also: The AI Wildfire Is Coming. It's Going to Be Very Painful and Incredibly Healthy. (CEO).]
