Building a $200M Bootstrapped Chess Empire with Chess.com CEO Erik Allebest

COVID happened, The Queen’s Gambit happened, some news cycles happened, and we thought, “Oh, this might just be a flash in the pan,” like treadmills and sourdough bread. But then in 2023, we had another crazy wave where all these kids started playing in schools because of short-form content, the Mittens bot, and the cheating scandal. We spiked again, and then when we came down, we were so much higher and maintained this baseline.

How do you think about designing a rating system for poker?

We’re bringing the chess playbook, which is: How good are you, really? Not just, can you buy the most chips, use a bot, or steal the most money? We’ve all played those games where you’re playing for M&M’s and someone’s just all in all the time, and then they buy more M&M’s. As people get used to thinking, “Wait, I actually care about my poker rating,” they’re going to care about it as much as money because it’s a reflection of their value and skill as a player. I think this is going to be quite an interesting innovation for poker.

Today I’m here with Erik Allebest, who bought the Chess.com domain out of a bankruptcy auction in 2005 for $55,000, when almost every investor told him it was an uninvestable niche passion project. Two decades later, he’s built the dominant chess platform, with more than 250 million members, 200 million a year in revenue, and a mission to get 1 billion people to play chess. It’s a game that’s more popular than ever, despite computers outclassing humans at it for the last 30 years.

1. Erik Allebest Introduction

We talk about what AI means for games, the future of Chess.com, how to build a rating system for poker, and the future of human skills. Welcome, Erik. It’s great to have you on No Priors.

2. Chess.com Today

Thank you so much for having me.

I’d love to make sure our listeners have a little bit of the backstory of Chess.com and how you built this business. But could you paint a little bit of a picture of usage, both for the company and the user base and product today, first?

Yeah, sure. We are much larger than I ever thought we would be, so it’s kind of wild to say these numbers for me. We’re about 10 million daily active users and about 40 or 50 million monthly active users. It’s always a little slower in the summertime, as people in the Northern Hemisphere are out and about. We have more than 250 million registered members and more revenue than I thought we would end up with as a chess company. I think this year we’ll do a little over 200 million.

We have about 650 people on our team who love chess, are passionate about the game, and are working hard to make our members happy, grow the game, and be the best possible place to work. Those are the 3 areas of our mission.

3. Buying and Scaling Chess.com

Amazing. You took a somewhat unconventional startup path, or founder-CEO path, to get here. I certainly think of you as a founder. How did you end up owning the business?

Well, we didn’t start by owning a business. We started by owning a domain name that we got from a bankruptcy auction in 2005. Someone else owned the domain name; they were building chess software, but they couldn’t pay their debts with the little bit of money they’d raised to try to do that. It ended up as a failed business.

A friend and I bought the Chess.com domain name for $56,000. We were going to build a chess community. We wanted to be like MySpace and build a chess community where people could come and express themselves, learn, and share. We bought the domain name and started building.

Could you bridge the gap from that to the scale of the community you have today? How did you grow, and how did you think about fundraising?

Yeah. We did think about fundraising. Obviously, I was at Stanford Business School at the time, so Sand Hill Road was right there, and I had access to a lot of venture capitalists. They were teachers and guests in classrooms I was in. I had a lot of meetings, and basically most of them said, “This is uninvestable. You should get a real job. Don’t waste your time with this.”

I wasn’t able to raise any money. No one believed in the vision. I asked some classmates if they wanted to join me on this venture, and they said, “Nah, we’re going to go do something serious.” My friend was kind of the CTO, and I was the product person. Just the 2 of us started building it together.

We didn’t raise any money. Eventually, I started putting money in. I had money from a couple of previous businesses I had sold. I borrowed a little bit of money from my friend’s mom and then paid it back later. We really grew at the speed of cash.

After we launched in 2007, right as I graduated from school, within 18 months we were starting to charge memberships for online chess learning, and we pretty quickly became profitable. Then we just grew: as we had more revenue, we would hire somebody new, whether it was a community manager, a developer, a systems administrator, or eventually designers. It just grew as we had money for it to grow.

We never again considered raising money. It never crossed our minds. We just thought, “Hey, we’re profitable. Let’s keep growing.”

We always thought, “Oh, when we hit 50 people, we’re never going to have more than 50 people on our team.” Of course, we blew past that, and then said, “We’re never going to have more than 100 people on our team.” Then we just stopped saying that because chess continued to surprise us with how big it got. It still surprises me.

But now I’m thinking, if 250 million people have said they want to play chess at some point on Chess.com, why don’t we have 50 million daily active users? A billion people should be playing chess.

Now our ambitions are pretty big, and we see the good that chess does in the world. It brings people together, gives them confidence, and teaches them that you never really lose if you learn. It’s a great game for learning and spending time.

4. Competition and Growth

So now our mission is huge, and we’re going to be bigger than we are today. We’re quite excited about our mission.

How did you think about competition and the rate of growth you needed to have?

Yeah.

How do you think about it today? There are platforms like Lichess out there, among the many drivers of people raising a huge amount of capital. Some businesses are more capital-intensive than others, but even when they’re not naturally, the desire to be the dominant player in a market the way Chess.com is, right, is, I think, a common driver.

I think that’s fair. I want to give the caveat that the chess industry, as we call it today, didn’t exist 20 years ago. It was some apps and a couple of players. There was the Free Internet Chess Server, or FICS, and the Internet Chess Club, or ICC. Those were the 2 major players. There was Yahoo Chess.

We came on and relentlessly focused on what we wanted as players ourselves. We wanted a product that felt great. We wanted it to be free to play. We wanted to be in the browser. We wanted it to be a wonderful experience. We really just focused on the user experience above all.

Over time, that wins out, and most of the others fell by the wayside. Obviously, Lichess exists today. They’re kind of the Linux of chess. They exist for a really important reason. It’s great for the community, it’s open source, it does what it does, and we coexist here. We drive the growth of the game through what we do and through the investments we’re able to make because we generate revenue. They serve a different part of it.

The interesting thing is that chess is not patentable. There are thousands, if not tens of thousands, of chess apps in the App Store and chess websites. At the end of the day, the product, community, and content are going to win out. It’s really just this relentless focus on creating the best possible experience.

I do think there are other markets and businesses where you need to raise money, whether to move at speed. Again, we’ve built this for 20 years. Others need to move faster, or there’s more investment in certain areas, or obviously there’s hardware or inventory. Those are different types of businesses.

But for a pure software and content business like ours, where we didn’t have a major tech company bearing down on us, we were able to take a little bit of a slower road. It was great. It developed a great culture and allowed us not to need outside capital.

You said that part of why you were able to grow in the way you did was that there weren’t a lot of people who believed the business would be as big as it is, or that the industry would actually be an industry. At what point did you think, “Oh, this is actually going to be a big business,” versus something I’m personally passionate about?

Yeah, I think 2024 was when we thought this would be a big business.

That was not that long ago.

Not that long ago. Before COVID and The Queen’s Gambit, we had 1,000,000 daily active users, and we were shocked at that. But then when COVID happened, The Queen’s Gambit happened, and some news cycles happened, we thought, “Oh, this might just be a flash in the pan, like treadmills and sourdough bread and other things that people did during COVID, and we might just come back down to where we were.” But we actually stayed really high after that, a little bit lower than our peak in 2022.

Then in 2023, we had another crazy wave where all these kids started playing in schools because of short-form content, the Mittens bot, the cheating scandal, and all these other things in 2023, and we just spiked again. And then when we came down again, we were so much higher, and we maintained this baseline. So, in 2024, we thought, “Oh my gosh, this thing is actually sticking around. It’s actually growing and compounding over time.”

I think this is a lot bigger than we thought it was going to be, which was fascinating. It’s also terrifying in some ways, because if your business is shrinking, it’s scary: How do you make it grow? If your business is flat, it’s scary: How do you make it grow? If your business is going up, it’s scary: How do you maintain that growth, or how do you deal with it? We literally had issues with scalability across the product and the tech and all those things.

5. Chess and Cultural Relevance

So it’s been pretty white-knuckle. I think for the last year, it’s actually been calmer than it ever has been, just because we’ve had the team in place and our growth is more predictable. We’ve finally gotten our hands around, organizationally, what it means to be a 650-person, fully remote company. So it’s been pretty smooth, and we’re now focused on a lot of experimentation and product improvements, infrastructure and tech, and obviously the integration of AI and what that’s meaning. It’s been an interesting last 12 months for sure.

I want to ask about 2 more business topics and then talk about AI in the context of chess and your reflections on that. The first would just be: How do you like The Queen’s Gambit and the increasing cultural relevance of chess? What’s your reflection on that?

Honestly, it’s incredible because I got into chess a little bit late in life. I was 18, still going to college and getting into the game, and I thought, “Nobody plays chess. No one talks about chess.” It was almost like a secret hobby. I was a skater-snowboarder who kept chess as the secret thing I did.

When I was in high school, it was for nerds. No one would talk about it. Why would you spend time on that? That’s what I grew up with. And then now to have my own kids, where all their friends are playing chess, and chess is cool, and the jocks play chess and the nerds play chess, and everybody plays chess—and then you’ve got Louis Vuitton centering its whole fashion shoot around chess—it just blows my mind. I do feel partly just along for that ride, but I also feel that we’ve been partly responsible for that.

We’ve kind of revolutionized what it means to be a chess player. Chess can be in your pocket; you can do it any time. The content is funny, relevant, and interesting. We also just redefined what it meant to be a chess player, because previously, you weren’t really a chess player until you were rated 2,000 or above, right? If you weren’t that, you weren’t really there, and you weren’t really a chess player.

6. AI Investments at Chess.com

But now everybody—we kind of changed the narrative, and we celebrate your mistakes, when you hang your queen, and if you’re rated 500, that’s fine. You’re still a chess player. You’re still part of the community, and you’re on your journey. So I think it’s been honestly one of the great honors of my life to be a part of that and to see that we culturally changed what it means. When you see pictures of Lewis Hamilton flying in his private jet playing chess on his phone, it just blows my mind. It’s been wild.

Yes. Yes. I was the high school nerd who played chess, but my kids now are different—my 8-year-old plays and teaches chess. They’re in a nerdy town, but it’s common enough that, I don’t know, 20% of the kids do after-school chess, right? Which is a totally wild thing to think about—soccer.

Seriously.

7. Private Equity Investment

You had a huge announcement recently that’s a big change in terms of the CVC investment. Tell us about that—what it means for the business and how you thought about working with a private equity firm after so many years of just being a bootstrapped business.

We’re still a bootstrapped business because CVC came in, but they bought secondary. That was part of the fundraising cycle. Obviously, General Atlantic was really the first private-equity firm to believe in us, back in 2020 or 2021. They saw our growing business and had conviction that we were a strong player in an interesting market, and they came in.

We had another investor. It’s kind of interesting because, if you go back in time, we were entirely privately held, and someone came along and said, “I love chess. I want to invest,” and we were like, “No, no, no.” Finally, we said yes, and they bought a little bit. They said, “I’ll hold on to this forever. I just want to be a part of this.” Then 5 years later, they said, “I need to get out of this. I need to sell.” We were like, “What? You said you were going to be here forever.” They said, “Don’t worry. I’ve got another guy.”

Then this other investor came in and said, “No, but I want to own X%,” and we reluctantly let him in a little bit more. He said, “But I love chess. I’ll be here forever.” Then, 3 years later, he said, “I’ve got to sell.” We said, “What? You said you were going to be here.” So then we were at such a scale that we had to find a different scale of investor.

We did the rounds with all the private-equity firms, and I really did not enjoy that process. I really didn’t enjoy most of the people that I met during that time. They were really focused on what I thought were the wrong things. But when I met General Atlantic and Tenzing, they really believed in our mission, and they believed that if we focused on our mission, we would build a wonderful business.

That was aligned with what we felt, and so they made an investment—again, buying secondary, buying shares from existing investors, with no infusion of capital. Eventually, they came to their fundraising cycle. They’ve got to make returns to partners and do their thing, and so then we again had to look for another person to come in.

We found CVC, and we were very, very happy to be working with CVC. They have such deep experience in gaming, sports, and community businesses, and we really just felt a bond and an alignment that when you take care of your community and your product, you’ll build a great business. So they invested in buying out different shares from different people. General Atlantic reinvested as well, so they’re still with us in this new venture together.

We’re as committed as ever to continue to grow the game and to follow our mission. But we’re still a business that doesn’t need capital to grow.

How does it change? Has it changed the way you run the business to have these increasingly at-scale outside investors?

Yeah, it actually has, but in a wonderful way.

Okay, this is against the conventional wisdom of private equity being involved. So say more.

I can recognize that a lot. You hear the tropes about private equity and where they give you money and then just say, “Work harder,” or whatever—“Do better.” It hasn’t been like that at all with General Atlantic or with CVC. Really, it’s been great knowledge sharing across what they’ve seen in the industry and what we do.

They’re in the weeds on the product and the community, and they’ve really been great at pushing us to be our best. They’re not just saying, “Do better,” but, “Here are some areas. Have you looked at this?” It’s all just made us stronger. And then all the operational stuff, all the forecasting, and all the operational excellence that we’ve really brought to bear—that we’ve needed to do to grow up and do this—it’s been wonderful and has made us better and stronger.

As our reporting gets better, we learn more about things, and we experiment and learn. All those things really matter, not just for reporting to investors but actually for operating the business. I’ve really enjoyed our time with General Atlantic; they’ve made us great. I’ve learned so much as a CEO. Being an entrepreneur with 2 to 5 other people on your team, or 10, is one thing, but being the CEO of many hundreds of people and a company with a valuation in the many billions, or whatever, changes the landscape of what I do.

I’m just grateful that they’ve been there to help me learn and grow into these different roles. That has progressed along my own path as I lead this company, and we’ve matured a lot. It’s been great.

8. Playing Games Amid Evolving Tech

Super cool. One of the reasons I was excited to talk to you, besides being excited about chess, was that chess is probably our longest-running experiment in what happens to a human activity after machines become superhuman at it. Deep Blue was 30 years ago, right?

We were just talking about how there are different drivers. It could be the cultural orientation of the community, tools, moments, or content like The Queen’s Gambit. But the answer is that humans definitely care more about chess than they did 30 years ago, right? I think there were a lot of predictions when Deep Blue beat Kasparov that chess was over. What did people misunderstand about why humans play games, or what do you think happened instead?

It’s so interesting. Fundamentally, humans want to do human stuff. That’s humans competing against other humans, humans making things, and humans solving problems. There are certain areas where machines have gotten better than humans at things, but in the case of chess, it has pushed humans to be better and to do better in their field.

It’s really interesting because grandmasters and world champions were using early versions of computers to help them with ideas that they would then take into the human-versus-human realm. Then, at some point, computers got so much better, and there was Stockfish, this chess engine. That chess computer actually made chess pretty boring for a little while because it was so perfect, and all these players tried to play like the best computer. They were grinding out these boring endgames, and it kind of just got boring.

Then neural nets came along. That was the next iteration of AI. Early in the game of Go, with Leela, these neural nets came along, and they started training chess on different chess positions. They let this self-reinforcing learning come out, and they ended up with Leela Chess Zero, the chess engine. That started beating Stockfish in ways that were unexpected. It was actually aggressive, did unconventional things, and really pushed the game forward.

What was interesting is that computers at first made chess a little bit more boring, but then made it so much more exciting. We’re seeing more exciting chess than we ever have, and the players have gotten better. Computers are now able to help us unlock the game in ways that make our enjoyment of the game better, whether it’s the AI coach in Game Review that reviews your game and helps you learn from it, playing against the computer, or generating puzzles that are specific to you.

AI has really helped humans enjoy chess more. I don’t know exactly how that’s going to play out. Right now, AI in mathematics is a big deal. Is it solving too many problems? But then you’ve got AI that’s unfolding proteins and solving for cancer, while humans are doing the research too. It’s really this hand-in-hand partnership where the best of human creativity and the best of AI can help move humans further. I don’t know. I’m pretty optimistic about the future, honestly.

I’m very inspired by the idea that AI can help humans get better at things much faster, or technology in general. If you took a talented 10-year-old today versus 30 years ago, how much faster do you think they could reach Elo 2000, or master level, or something?

We’re seeing it already. There are younger and younger players. There are 7-year-olds who are giving grandmasters a run for their money, and there’s a 10-year-old—I’m going to butcher her name, so I’m not even going to say it—an Indian girl from England. She’s crushing everybody. She’s incredible.

To your point, take the 10-year-old, give them the tools, and see where they come out. When my son was younger than 10, he obviously had access to YouTube and different things. Now he’s 18 years old, and he’s a better video game creator than I ever would have been because he self-learned everything on YouTube and with different AI tools. He doesn’t use AI on the creative side, but he uses it for research on how to solve problems.

This access to information and access to superhuman intelligence really is making people learn faster and better. To your point, who knows what’s going to be coming next for the next generation? For those who are young now, as they learn faster, what will they create?

9. Chess.com Future Vision

I think the downside, and the scare that everybody has, is: When there’s a superintelligent AI that knows everything, why would anyone ever write an essay again? Why would they ever think? Why would they ever do anything? If you can just tell AI, “Draw me a picture of X, Y, Z,” why would a human ever do it?

10. Tech, Skill Distribution, and Expertise

I understand that point of view, and I have my worries. I think there’s research that shows that people who use AI in certain areas do stop thinking and engaging their brains. We have to set up guardrails. We’re going to have to figure out what works and what doesn’t. But again, I think it’s going to push people further into learning and creating better things.

If everyone has this information access that you describe, why aren’t we all equally good at chess? What does having access to this do to the skill distribution in your data or in your experience?

I mean, like anything, you’ve got to do the repetitions to put it in your brain. Just because we have access to it on the computer—

Yeah.

So it’s really about people putting in a little bit of work. One thing that I really love is the concept that if you take any given day in your life and multiply that by 1,000, that’s kind of what your life looks like. If you do 5 chess puzzles a day, multiply that by 1,000: You’ve done 5,000 chess puzzles. You’re going to be much better.

If you want to do 100 puzzles a day, multiply that by 1,000. Or play 10 chess games a day, or do yoga every day for 1,000 days. It’s not the actual individual thing that you do on one day, but your habits really compound over time. You can put that into any field, whether you do 1 sketch a day or go for 1 small run every day. It’s the same in any field. If you do research into any topic, it compounds.

That’s one thing that I do think AI is so great at. You can literally get into whatever AI program you’re using and start researching something. It can walk you through it, help you get exposure to ideas, refine ideas, and have these conversations. It’s like having access to walking into a professor’s office and starting to ask questions, but you get it in your pocket all the time.

Of course, there are issues with biases. It tells you what you want to hear, overinflates your ego, and there are all these problems with it. But honestly, for people who use it well, you can deep-dive into subjects and learn and train at a tremendous pace.

You have this incredible dataset with Chess.com of humans learning—millions of people at every rating, making mistakes and improving. What can you tell us about how humans acquire expertise, or how to get them up that ramp faster?

Fortunately and unfortunately, it’s actually quite an easy answer.

Oh no.

Yeah. It’s just repetition of the small building blocks. It’s doing puzzles, reviewing your mistakes, and, if you want to play certain openings, training.

There really aren’t shortcuts to the process. There are shortcuts in the tools. We’ve tried to make it as easy as possible to do your puzzles and train on your different elements, and we have a whole set of tools coming later this year that’s going to make it even easier. But you have to put in the repetitions into your brain. You have to store that.

It’s the same as when you train a neural net, right? You give it a bunch of data, and of course it can train in parallel, doing all these different memory channels at once and training on these things. Our brains don’t work quite that way, but we have to put in the repetitions. I think a lot of people these days, because of the immediacy of social media and the immediacy of our lives in general, forget that practice is something you can’t really shortcut. You have to put in the time.

I’m going to ask kind of a funny question. Feel free not to answer. How do you guys think about cheating at Chess.com? You’ve also dealt with an issue that I think a lot of the world is dealing with now. Maybe they’ll call it cheating or not, but machines can create superhuman output and pass it off as human performance, right?

It’s tough. I wish humans didn’t have this drive to take advantage of someone else, put themselves above somebody, or steal from them.

But there’s some segment of the population where, either for financial gain, they’re using AI tools and technology to steal from people, or even if they’re just getting onto online chess and loading up a computer to steal rating points, boost their ego, or whatever it is. It is sad, and it bums me out that humans can’t just get in there and be honest and full of integrity at all times.

That said, chess has been dealing with cheating for a very long time, much longer than AI. We’ve had these chess computers, and a lot of people thought it was an existential threat to the game and that it would end the game. Unfortunately, we also have technology to fight the cheating. We spend a lot of time, a lot of money, and a lot of resources on anti-cheating, basically. We have a whole set of tools, which I’m not going to get into because I don’t like to give people ideas about how we do it.

We track a lot of stuff. We have more data, more statistical models, and more machine-learning models that track how people play chess. We have access to all this data. We know what it’s like when humans play chess, and we know what it’s like when computers play chess. We just get better and better all the time.

It’s definitely something incredibly important that we think about often: protecting the integrity of the game, both at the casual level and at the professional level. We actually have 2 different work streams that do that: How do we detect it in general? And then, when we have prize money on the line in professional events, how do we deal with that?

11. What Makes Chess Special

It’s something we spend a lot of time on, and we feel really great about our role in protecting the game. We feel very confident that we’re doing a great job. Cheating can’t be prevented because you can’t put a webcam in every single person’s home. But we do a really good job at catching it, banning people who do that, and trying to educate them as well. It’s definitely something I’m very passionate about.

Because you are super passionate about it and know the craft of chess, what do you think makes chess special as a game? Why should a billion people play chess versus the many other games that are out there?

There’s something special about chess, especially in a world where anything is possible these days. You could give an AI a prompt and have 10,000 new board games tomorrow. We’ve seen this with the explosion of music over the last several decades: there’s infinite music. When there’s infinite music, sometimes people go back to The Beatles and Led Zeppelin because they’re the classics that everyone can rally around and have a shared experience. I think that’s the same about chess: there are no loot boxes, no new skins that dropped, no changes to the rules, and no new heroes to learn.

It’s the simplest set of rules. It’s a full-information game, and there’s no luck involved. You can load up a game on your device or get your chessboard out of the drawer and set it up, and you’re having the same shared experience forever. It has enough complexity to blow your mind, but enough simplicity that you can learn it.

It fits that sweet spot between complex and basic, and timeless. So I don’t know; evolutionarily, it just became the king of games, we can say, because of its many attributes. I think a lot of people in today’s world are looking for things that they can hold on to in a world of increasing, exploding proliferation of everything.

When you look forward, do you think of Chess.com as a game company, an education company, or a social network? You have creators and influencers, so is it a media company? How do you frame the business besides the mission of getting everyone to play chess?

Well, we’re definitely a chess company. That’s the easy answer: We all love chess, and we love playing it. So we’re a chess company, but that does have many facets to it. We’ve said we’re a gaming company, a content company, and a social network. We are all of those things because chess, the game, encompasses all of those things.

More recently, we have branched out—not that we’re now a games company, but a lot of us do love a lot of different games. Even though chess is 99.99% of what we do, we recently launched Gambit at gambit.com, which is our poker site, and you can play Gambit on your phone as well.

But we’re doing poker in a different way, too. We’re bringing the chess playbook, which is poker for ratings: How good are you really? Not just, can you buy the most chips, use a bot, or steal the most money, whatever it is, but how good are you really?

And we’re going to roll out other games as well because we like the playbook of what we’ve done. We’re cooking up a bunch of other classic games. We’re going to be launching those out there. We have our take on how gaming should be done and can be done in a pure and wholesome way that promotes great learning and education.

12. Founder Advice

You’ll see us rolling out more games in the future, but it’s a small team that’s doing it. It doesn’t really take away from our mission of chess. But we are branching out.

Okay. I have 2 more questions for you about the future. One is for founders who are trying to figure out if they’re in the right market, in a niche market, too early, or just wrong, right? What wisdom do you have for folks thinking about those questions? When you did this, a lot of people told you it was too small. I think one of the curses of being a founder today is just how much founder advice there is out there.

Okay. At the time when I was getting into doing this 20 years ago, the playbook was: hire a technical founder from Stanford, raise a bunch of money, get an office, go after a big market, and spend a bunch of money on customer acquisition. We literally did all the opposite of that. I hired my friend from San Jose State. We worked remotely. We didn’t raise any money. We didn’t pay any money for customer acquisition. We picked a tiny market.

So I don’t know. I think people should listen to their heart and listen to what they want to do. They should think: What do they want to see exist out there in the world? Then they should relentlessly go after that more than what the market is saying or what all these different things are.

Of course, you have to listen to your customer, and you have to pivot if it’s not working. But what’s your vision for the world? What is the minimum amount of resources you need to go prove that out? Who are the great people you want to work with? None of the rest of it matters.

Just go execute and put something beautiful into the world that’s unique and creates value for people, and you’ll figure the rest of it out. Stop listening to people just giving you advice on what to do. Just go do it.

13. AGI/ASI Predictions

Okay, last question for you. Do you believe in AGI? Do you believe in AGI or ASI and their imminent arrival? What’s 1 thing you believe about the world if that is true?

I do believe in superhuman intelligence and that it will move at a faster and faster pace. I think it will be a little scary if we don’t put guardrails around that and rules for how it should engage with humans. I hope we can do that. I would say I’m more optimistic than pessimistic about the impact of that, though.

I would hope that it can help us solve some of the biggest problems around climate, politics, and education, and create a more equitable world. I worry that it can have the opposite effect. I think we’re already seeing the economic impact of big tech, and that too much money is flowing into the hands of too few. We’re not doing enough as humans to share what we’re creating.

I think this is less a technology problem and more a cultural problem. I hope that we can solve that by loving one another, sharing with one another, and connecting, so that we feel we have a greater stewardship and responsibility to this world. I think the technology is somewhat irrelevant to that.

We’ve had nuclear technology, guns, and an economic system for a long time, and it’s really what we do with those things as a culture, more than what the tools are themselves. Superhuman intelligence, AGI, and ASI can be used for good or for evil. It’s going to depend on the people who are in charge.

I wish I felt more confidence in the people who are in charge of this world right now, whether that’s the super-billionaires or politicians. I don’t know how we got to a place where the people who probably should not be in charge of the world are in charge of the world, and the people who should be are not.

I don’t know if we’re going to get out of that, but we are where we are. So I’m hopeful we can make some cultural changes and put some things in place to protect us. I think the interest and growth of chess is actually—I mean, it’s not a solution to all the world’s problems, but it’s incredibly optimistic to me because it is so clear that people want to acquire human skills even when the machine can outperform them, and they want to watch and appreciate exceptional human skill even when the machine could do much better.

Right. Yeah, maybe you limit that to gaming, though. I think in a world where you believe there is more capability and more abundance, people are going to spend a lot of time playing games. But I just think the idea that human skill is no longer relevant in the world of superhuman AI, just as a product of the technology itself, is nonsense.

Right. So there, I think we're super aligned, and there's a bunch of complexity around the guardrails and distribution of the fruits of that technology still.

Yeah. What are you investing in at Chess.com from an AI perspective—tools, or how the product changes?

Yeah, we use AI extensively across many different facets as a business and as an organization. It powers a bunch of our support team through automations to get people faster answers, but then obviously we have a bunch of great humans who work in our support team who help create those and who help with the human-to-human needs that are there. So, we've seen a great symbiosis in the support department.

We use it for data and for analysts, and they're able to ask questions and use LLM technology to get in and ask and answer really interesting things. We've built our own internal system. Our CTO, Josh, sees the future, and he long ago started building what everyone else is like, “Wait a minute, we need this,” which is our own internal system called GNS. It's an authentication and knowledge layer that goes across our whole organization, with all the right permissions and things, and stores it.

We're building our own martech technology so that we can more deeply integrate with our users and our data, and then, of course, we're also using it in our development and product life cycle. As we build specs, as we do more agentic development where, as I like to say, you have an idea or see a problem, fix a problem, we're just trying to shorten the timeline between when something is either an opportunity or a problem and when we push code live to our users, because ultimately that's really what matters.

14. How AI May Change Product at Chess.com

Software development cycles can get really long. By the time you think, “Oh, let's do an in-depth product scope. Let's get it on the roadmap. Let's build it. Let's build it again. Let's test it. Let's QA,” all those different handoffs and all those different pieces make it sometimes very long to get something out to users. So, we're really trying to shorten that down, and we're seeing great success with that. That's ultimately what we're here to do.

What do you think is the biggest way AI could change the product at Chess.com?

We're also using it in our product research and in the output of what users are getting as they go on their chess journey. We're working on things like getting all of your aggregated stats into your advanced stats and then comparing those to other users like you or users right above you. What do you need to improve on to get to the next level? We do a lot of that analysis through a lot of different research methodologies, including using LLMs and AI.

We're working on AI technology so you can have a chess coach in your pocket. Obviously, it's not a replacement for a human. If you really want to have a sit-down with a human, you should go hire a great chess coach near you or online. But if you want a little bit more of a casual experience or an on-demand coach, you have your AI coach in your pocket.

15. Poker Rating Algorithms

We're working on future products, too. Right now, we're prototyping more of an interactive experience where your AI coach looks at your games over the last week and gives you some feedback and recommendations, even if you want to have a chat with that coach. So, there are a lot of areas we're exploring right now where AI can be infused into the product in a positive way to help you on your chess journey.

I'm going to ask one more question. I don't know if there's a good answer, but I'm just curious because my three games are chess, Go, and poker, right? Poker's very different from the other two, and I play them very differently, as I think most humans would.

Yeah.

How do you think about how to design a rating system for poker when so much of it is interpersonal? Also, if you play poker for money, it depends on how you think about financial risk.

This is a great question. We're still evolving how we're doing ratings in poker. It does have to do with, again, the rating of the other people at the table, how many chips you win, and how many hands you've played. So, we do have a rating algorithm that I'm sure we will adjust over time.

As to how people play when they're playing a $100 game of poker versus a $1,000 game of poker, things change a lot. Or if you're playing for peanuts or M&M's on the table. We've all played those games where you're playing for M&M's, and someone's just all in all the time and they just rebuy more M&M's. So, it does matter.

But I think that as people get used to, “Wait, I actually care about my poker rating, and I treat this as something important,” I think people are going to care about it as much as money because it's a reflection of their value and skill as a player. Of course, even in chess, your rating goes up and it goes down, and you have your wins and your losses.

We think that people are going to care a lot about their poker rating. I certainly do. Losing $100 at a table isn't my favorite thing, but I don't care that much. Honestly, losing 100 rating points on my poker rating just really bothers me. So, I think this is going to be quite an interesting innovation for poker.

Yeah, I think it's super exciting. I am excited to start trying to work on my rating here, because I think it will be a very equalizing thing for people who play poker—to say, “Well, is Erik better than I am, or does he just have more M&M’s and is he a bully?”

That's a very good way of putting it.

Erik, thank you so much for doing this. It's super interesting, and congratulations on the business that you have passionately built. It's great to talk.

Thank you so much for having me and for this great conversation.