alt Hacker NewsPredicting OpenAI's ad strategy
Comments
> Yes, OpenAI is burning $8-12B in 2025. Compute infrastructure is obviously not cheap when serving 190M people daily.
So casual. Actual ad giants like Meta and Google are serving many more people than 190M while bringing in actual profit.
Yes, let's say these are just the early days and they are burning money just like any other VC company. But how are they going to scale up their hardware/usage and get a profit at the same time?
AI hardware is getting optimized YOY too but the flagship models are getting bigger every year as well. I don't see how they are going to get profit without jacking their prices at the same time. And price increases always hits usage growth.
Serving an ad is very cheap these days, while serving a big model is very much expensive.
AGI can have multiple meanings. Depending on who you ask, it can mean:
"Ads Generated Income"
"Artificial General Intelligence"
"A Google Imitator"
"Absolutely Great IPO"
It is any definition that fits the goal of the original secret definition of "100 Billion dollars in profits" from Microsoft and OpenAI [0].
There's no question that "AI" is the next advertising frontier. I've been saying this for years[1][2][3]. It is going to be the most lucrative form of it yet, and no "AI" company will be able to resist it. Given the exorbitant amount of resources required for this technology, advertising will probably be the only viable business model that can sustain it at scale.
[1]: https://news.ycombinator.com/item?id=35706981
> Mate come on. OpenAI is not dying, they're not running out of money. Yes, they're creating possibly the craziest circular economy and defying every economics law
You are starting with wrong assumption and contradicting yourself. Circular economy couldn't last forever once we start looking at the profit. They need money outside the funding to justify the funding.
You can't both say they are not earning at all and they are being greedy.
Even if they raise 10B in ad revenue (an order of magnitude higher than the author suggests) that would still imply a 100x valuation which is insane.
There's still an AI bubble.
"it seems that the pinnacle of human intelligence: the greatest, smartest, brightest minds have all come together to... build us another ad engine"
Putting aside the ridiculous hyperbole, the reason is that consumerism is our culture. Our cult-ure. Everything is oriented toward and reduced to consumption. Our worth as human beings is replaced by consumerist criteria and measures. It's why physicists leave research and work in finance where their training is repurposed in service of all sorts of financial jiggery-pokery.
"The A in AGI stands for Ads! It's all ads!! Ads that you can't even block because they are BAKED into the streamed probabilistic word selector purposefully skewed to output the highest bidder's marketing copy."
But note the implication. Sure, ads weaved into the content, but they still must be targeted. And here's the irony of the online existence. People often refrain from expressing various desires in public for fear of judgement. It's why the vitriol online is so much spicier. The world of social media where you can express repressed opinions, the world of games and other ahem media where you can sublimate all sorts of desires and fantasies - all of this is data for the AI machine. These companies, in some respects, "know" you better than the people in your life do - especially those parts of you that you could be embarrassed to reveal in public - and they use this information to manipulate you, largely for profit, but why not for broader social and psychological control. AI's convenience is already irresistible. It's the go-to in Google search.
The title is actually
The A in AGI stands for Ads
Predicting OpenAI's ad strategy[dead]
[dead]
To those who believe ads are evil and must be stopped, I ask how the world will work if we kill the freedom to sell space for commercial messages where people can see them.
I wish we collectively had a better understanding of those ad tech shifts being fundamentally zero sum.
If we treat marketing as a black box, where are the benefits from supposedly more efficient marketing? Ad budgets are the same. People have the same amount of disposable income (or less, really). So on the both sides of the box converting ad budgets into paying customers the sum is the same. Quasi-monopolistic ad networks (Google and Meta) just hoovered up the money that previously went into other ad spaces, like local papers. Now OpenAI is going to fight for the same pie.
Ad tech is a market failure.