OpenAI to begin testing ads on ChatGPT in the U.S.

[soAsian]

We are starting to test ads in ChatGPT free and Go (new $8/month option) tiers.Here are our principles. Most importantly, we will not accept money to influence the answer ChatGPT gives you, and we keep your conversations private from advertisers.It is clear to us that a lot of people want to use a lot of AI and don't want to pay, so we are are hopeful a business model like this can work.(An example of ads I like are on Instagram, where I've found stuff I like that I otherwise never would have. We will try to make ads ever more useful to users.)

https://twitter.com/x/status/2012253252771824074

It's not related to the chip industry, but it does have an impact on the industry. It either increases the demand for more compute, thus AI chips, or this is the last resort for Sam to get the money he needs to push OpenAI forward.

There's another possibility that an AI crash is coming, like the Dotcom bubble, and companies are trying to cash in as soon as they can and hopefully survive the crash.

Not that I think there's anything wrong with ads. Google and Meta made their money purely on ads.

 

[blueone]

 

[Daniel Nenni]

It's not related to the chip industry, but it does have an impact on the industry. It either increases the demand for more compute, thus AI chips, or this is the last resort for Sam to get the money he needs to push OpenAI forward.

There's another possibility that an AI crash is coming, like the Dotcom bubble, and companies are trying to cash in as soon as they can and hopefully survive the crash.

Not that I think there's anything wrong with ads. Google and Meta made their money purely on ads.

Sad to hear but expected. The not accepting money is a dig at Google search. I don't use Gemini, does it give preferences for sponsors?

 

[tooLongInEDA]

Let's think about this for a moment. Is this Sam Altman saying that he's not going to make enough money without ads being a significant revenue stream ? That shouldn't be a huge surprise. However, the total advertising market is at the end of the day a finite one and it's not going to grow at the rate of AI investment - how could it - there's only a finite percentage of everything we buy that we're prepared to part with as the advertising tax and net consumer demand can't increase that fast. So most of whatever OpenAI makes in ad revenues is likely going to come from cannibalising some other ad sales channel.

Altman's quote reminds me of this classic: "These are my principles, and if you don't like them, well I have others", Groucho Marx.

 

[soAsian]

However, the total advertising market is at the end of the day a finite one and it's not going to grow at the rate of AI investment

The ad industry is shifting budgets from traditional media (TV, print, billboards) to digital platforms.

This trend is driven by measurable ROI and targeted advertising capabilities offered by digital platforms.

The industry's growth is also fueled by the sale of anonymized, aggregated data, enabling businesses to optimize marketing efforts. Digital advertising's trackable KPIs (e.g., click-through rates, conversion rates) provide transparency and accountability, making it an attractive option for advertisers.

IMO, OpenAI's ChatGPT offers measurable ROI. It probably collects more personal data than Google and Meta. Companies want trackable results. They want to know if people actually view/click on their ad. That's something TV or cable can't do.

Some players will die out, and some will get a bigger piece of the pie. The New York Times' physical newspaper is dying out, while its digital subscription is growing. The money's just shifting like Intel might die out if ARM takes off on Windows

.

 

[tooLongInEDA]

The ad industry is shifting budgets from traditional media (TV, print, billboards) to digital platforms.

This trend is driven by measurable ROI and targeted advertising capabilities offered by digital platforms.

The industry's growth is also fueled by the sale of anonymized, aggregated data, enabling businesses to optimize marketing efforts. Digital advertising's trackable KPIs (e.g., click-through rates, conversion rates) provide transparency and accountability, making it an attractive option for advertisers.

IMO, OpenAI's ChatGPT offers measurable ROI. It probably collects more personal data than Google and Meta. Companies want trackable results. They want to know if people actually view/click on their ad. That's something TV or cable can't do.

Some players will die out, and some will get a bigger piece of the pie. The New York Times' physical newspaper is dying out, while its digital subscription is growing. The money's just shifting like Intel might die out if ARM takes off on Windows

.

All true. But my understanding is that the bulk of advertising has already gone over from the legacy media to the internet companies. If that's the case, this is mainly a redistribution of the cake amongst the internet/AI companies (if OpenAI is a big winner, someone else is losing big). I just don't see how the advertising TAM can significantly outgrow GDP.

 

[horace]

There is only that many ad dollars going around. Google can keep its shares, so the ad dollars have to come from Facebook.

 

[Xebec]

Sad to hear but expected. The not accepting money is a dig at Google search. I don't use Gemini, does it give preferences for sponsors?

According to Grok, Gemini does NOT give priority to sponsers or modify it's responses based on that.

However, I think all AIs probably indirectly do give preference to sponsors. They're trained on "the internet" -- he (or she) who advertises the most should indirectly (training data) and "directly" (real-time internet searches) have additional focus in the LLMs output.