4 ms·

Not really. The best math I've seen says OAI cannot break even with ads on free tiers without about 5X as many users. That's to break even, not to be wildly pro

• jsnell 1y ago
  It'd be easier to address said "best math you've seen" if you could provide a link to that analysis... I hope it wasn't by Ed Zitron. But it seems pretty obvious that the math must be based on some incorrect assumptions. The unit inference costs of high quality LLMs are much lower than the unit costs of serving high quality web search queries. The LLM costs have also been decreasing rapidly -- 1000x in two years seems like a fair estimate -- while search engine costs haven't. (If anything they've been going up.) And web search is obviously a business that is very profitable with the ad model, despite those higher unit costs. > OAI will need more than ChatGPT, pro and "free" to be anything close to web search for ad revenue. I don't understand this part at all. Revenue is proportional to traffic and ad rates. Why would the ad rates be lower for chatbots? Or why would their traffic obviously be lower? This is also moving the goalposts. Search ad revenue is what, a $250B/year market. OpenAI doesn't anywhere near that much revenue to be fabulously profitable. A tenth of it would already be more than enough.