With openAI announcing they’re about to start shoving ads into chatgpt there’s gonna be some takes about it being the end of Googles ad business or metas ad revenue, so let’s just sense check that with some numbers.
Chat GPT is definitely a consumer juggernaut, at last count has something like 900 million users (give or take) but only a small single digit percentage of those are paying. Ads will be served to the rest.
Ad business take serious time to scale. Example, Amazon started offering them around 2017 and by 2020 they only generated $20b in sales for them. Which isn’t small, but it is the context of a trillion dollar company (which Amazon is and which OpenAI is trying to be). Amazons ad business is now $56b per year (2024 figures) so there’s potential there but again, it takes time.
As for Meta, they’ll probably be fine. They did $50b in ad revenue too. Only difference? It was in a single quarter not a year.
If I had to guess in 5 years time I’d say that one of the LLMs will take a chunk of ad revenue out of the market so that global ad spend will be split differently m, but there’s no good way to figure out who that might be yet (e.g. only 6 months ago Google was the main loser in the AI race, now it’s everyone’s consensus winner).
Ads in ChatGPT now. Effects on Meta and Google?
byu/lowfrequencyinvst ininvesting
Posted by lowfrequencyinvst
2 Comments
All in on Google.
If they did something similar, they have the in house knowledge and network already set up. Their ad suggestions would actually likely be relevant because of how much data they’ve sucked up on consumers over the years.
Plus I would bet my life savings that Gemini wins the corporate b2b market share of AI usage in enterprise. Sprinkle some bullishness on Waymo and Google is king.
Meta is a picture perfect example of tunnel vision, their executive decisions reek of going all in on stupid shit and when they realize they are behind an industry, losing even with second movers advantage.
OpenAIs niche will be cheap consumer grade personal AI. Money to be made there but way more money to be made selling AI into enterprise.
Just another sign Google will be the AI winner