12 ms·
I think people are massively underestimating the money they will come from ads in the future. They generated $4.3B in revenue without any advertising program t
by nojs 1y ago
I think people are massively underestimating the money they will come from ads in the future.
They generated $4.3B in revenue without any advertising program to monetise their 700 million weekly active users, most of whom use the free product.
Google earns essentially all of its revenue from ads, $264B in 2024. ChatGPT has more consumer trust than Google at this point, and numerous ways of inserting sponsored results, which they’re starting to experiment with with the recent announcement of direct checkout.
The biggest concern IMO is how good the open weight models coming out of China are, on consumer hardware. But as long as OpenAI remains the go-to for the average consumer, they’ll be fine.
- iambateman 1y agoI think this is directionally right but to nitpick…Google has way more trust than OpenAI right now and it’s not close. Acceleration is felt, not velocity.
- piskov 1y agoGoogle and trust are an oxymoron
- QuantumFunnel 1y agoThe only thing I trust google to do is abandon software and give me a terrible support experience
- jacquesm 1y agoAnd to charge you for stuff you don't want and don't need as if you are using it every day through tied sales. Hm... wasn't that illegal? https://www.investopedia.com/terms/t/tiedselling.asp https://www.investopedia.com/terms/t/tiedselling.asp
- anonymousiam 1y agoI agree with you, and my impression of the trust-level of Google is pretty much zero.
- chmod775 1y agoThis really depends on where you are are. Some countries' populations, especially those known to value privacy, are extremely distrustful of anything associated with Facebook or Google.
- jacquesm 1y agoI really don't trust either. Google because of what they've already done, OpenAI because it has a guy at the helm who doesn't know how to spell the word 'ethics'.
- renewiltord 1y agoThat's mostly because LLMs think in terms of tokens not letters, so spelling is hard.
- floren 1y agoHe knows there's no "I" in "ethics"
- da_chicken 1y agoYeah, I agree with you. Between Android, Chrome, YouTube, Gmail (including mx.google.com), Docs/Drive, Meet/Chat, and Google Search, claiming that Google "isn't more trusted" is just ludicrous. People may not be happy they have to trust Alphabet. But they certainly do. And even when they insist they're Stallman, their friends do, their family does, their coworkers do, the businesses they interact with do, the schools they send their children to do.
- djtango 1y agoLike it or not, Google has wormed their way into the fabric of modern life. Chrome and Google Search are still the gateway to the internet outside China. Android has over 75% market share of all mobile(!). YouTube is somewhat uniquely the video internet with Instagram and Tiktok not really occupying the same mindshare for "search" and long form. People can say they don't "trust" Google but the fact is that if the world didn't trust Google, it never would have gotten to where it is and it would quickly unravel from here. Sent from my Android (begrudgingly)
- lemonlearnings 1y agoWith search you dont fully trust Google. You trust Google to find good results most of the time them trust those results based on other factors. But with AI you now have all trust in one place. For Google and OpenAI their AI bullshits. It will only be trusted by fools. Luckily for the corporations there is no end of fools to fool.
- rightbyte 1y ago> And even when they insist they're Stallman Looking through the JS-code of this site I was happily surprised finding 153 lines of not minified but pretty JS. I anticipated at least some unfree code. So I guess there is a chance some user might rightfully claim this.
- zdragnar 1y agoWhat is OpenAI's moat? There's plenty of competitors running their own models and tools. Sure, they have the ChatGPT name, but I don't see them massively out-competing the entire market unless the future model changes drastically improve over the 3->4->5 trajectory.
- _e8at 1y agoIt's Sam. From what I understand he was the only one crazy enough to demand hundreds of GPUs for months to get ChatGPT going. Which at the time sounded crazy. So yeah Sam is the guy with the guts and vision to stay ahead.
- croes 1y agoOpenAI isn't ahead
- redman25 1y agoIt is in terms of users. There's a lot of sticking power to "the thing you already know and use".
- no_wizard 1y agoUnless there is little friction in switching. I don’t feel any of the LLM products have a sticky factor as of yet, as far as viewing it from a consumer lens
- Keyframe 1y agoProbably consumers. Enterprise is Anthropic, double ahead: https://menlovc.com/perspective/2025-mid-year-llm-market-update/ https://menlovc.com/perspective/2025-mid-year-llm-market-upd... note that menlo is invested in anthropic, but still..
- shermantanktop 1y agoPast performance is no guarantee of future results. You might see Sam as a Midas who can turn anything into gold. But history shows that very few people sustain that pattern.
- piskov 1y agoI don’t pay $200 per month to use a product tightly coupled for ad revenue (ahem tracking). That’s why I use Kagi, Hey, Telegram, Apple (for now) etc. I really hope OpenAI can build a sustainable model which is not based on that.
- nharada 1y agoI suspect ads would be an attempt to monetize the free users not people paying $200/mo for Pro. Though who knows...
- piskov 1y agoFirst, as an advertiser you want those sweet-sweet people with money. Second, if they put “display: hidden” on ads doesn’t mean they will create and use entirely other architecture, data flow and storage, just for those pro users.
- twelvechairs 1y ago> But as long as OpenAI remains the go-to for the average consumer, they be fine. This is like the argument of a couple of years ago "as long as Tesla remains ahead of the Chinese technology...". OpenAI can definitely become a profitable company but I dont see anything to say they will have a moat and monopoly.
- muzani 1y agoThey're the only ones making AI with a personality. Yeah, you don't need chocolate flavored protein shakes but if I'm taking it every day, I get sick of the vanilla flavor.
- idiotsecant 1y agoHuh? They're actively removing personality from current models as much as possible.
- deadbabe 1y agoIn 10 years most serious users of AI will be using local LLMs on insanely powerful devices, with no ads. API based services will have limited horizon.
- api 1y agoSome will but you’re underestimating the burning desire to avoid IT and sysadmin work. Look at how much companies overspend on cloud just to not have to do IT work. They’d rather pay 10X-100X more to not have to admin stuff.
- deadbabe 1y agoI’m talking about prepackaged offline local only on device LLMs. What you are describing though will almost certainly happen even sooner once AI tech stablizes and investing in powerful hardware no longer means you will become quickly out of date.
- FpUser 1y ago>"Look at how much companies overspend on cloud just to not have to do IT work." I think they are doing it for a different reasons. Some are legit like renting this supercomputer for a day and some are like everybody else is doing it. I am friends with the small company owner and they have sysadmin who picks nose and does nothing and then they pay a fortune to Amazon
- beeflet 1y agoIt is just downloading a program and using it
- IncreasePosts 1y agoOk, but there will be users using even more insanely powerful datacenter computers that will be able to our-AI the local AI users.
- bad_haircut72 1y agoNvidia/Apple (hardware companies) are the only winner in this case
- Rohansi 1y agoIt'll be interesting to see the effect ads have on their trustworthiness. There's potential for it to end up worse than Google because sponsored content can blend in better and possibly not be reliably disclosed.
- exasperaited 1y agoThere is also the IMO not exactly settled question of whether an advertiser is comfortable handing over its marketing to an AI. Can any AI be sensibly and reliably instructed not to do product placement in inappropriate contexts?
- typpilol 1y agoAlso what effect will these extra instructions have on output? Every token of context can drastically change the output. That's a big issue right now with Claude and their long conversation reminders.
- exasperaited 1y agoYou mean, for instance, if you ask it to insert an advert into content, can it do so, based on its training set, without changing the wider content into advertorial? It's a really good point. And it has some horrifying potential outcomes for advertisers.
- typpilol 1y agoExactly. Am I going to come back from coding with a function named BurgerKing or something? Lol
- syntaxing 1y agoThey should be concerned with open weight models that don’t run on consumer hardware. The larger models from Qwen (Qwen Max) and ZLM (GLM and GLM air) perform not too far from Claude Sonnet 4 and GPT-5. ZLM offers a $3 plan that is decently generous. I can pretty much replace it over Sonnet 4 in Claude Code (I swear, Anthropic has been nerfing Sonnet 4 for people on the Pro plan). You can run Qwen3-coder for free upto 1000 requests a day. Admittedly not state of the art but works as good of 5o-mini
- imachine1980_ 1y agoI believe regular people will not change from chatGPT if it has some ads. I know people who use "alternative" wrappers that have ads because they aren't tech savvy, and I agree with the OP that this could be a significant amount of money We aren't 700 million people that use it.
- syntaxing 1y agoDefinitely don’t argue against that, once people get into a habit of using something, it takes quite a bit to get away from it. Just that an American startup can literally run ZLM models themselves (open weight with permissive license) as a competitor to ChatGPT is pretty wild to think about
- hx8 1y agoOne of the side effects of having a chat interface, is that there is no moat around it. Using it is natural. Changing from Windows to Mac or iOS to Android requires changing the User Interface. All of these chat applications have essentially the same interface. Changing between ChatGPT and Claude is essentially like buying a different flavor of potato chip. There is some brand loyalty and user preference, but there is very little friction.
- ab5tract 1y agoMySpace collapsed in something like 18 months.
- skanaley 1y ago"Please help me with my factorial homework." buyACoke 0 = 1 buyACoke rightNow = youShould * buyACoke (rightNow `at` walmart) where youShould = rightNow at = (-) walmart = 1
- alok-g 1y ago>> ... underestimating the money they will come from ads in the future. I would like AI to focus on helping consumers discover the right products for their stated needs as opposed to just being shown (personalized) ads. As of now, I frequently have a hard time finding the things I need via Amazon search, Google, as well as ChatGPT.
- dickersnoodle 1y agoGood luck with that. Every supermarket I've been in has those stupid baskets or racks of stuff blocking the aisle and their data must show that it gets people to buy a little more of that stuff even though it makes me quite resolved to never buy the shit they're forcing me to look at in order to go get the five things I really need.
- bradly 1y agoAre they currently adding affiliate links to their outbound Amazon product links?
- wnevets 1y agoBanner ads would only be the start of the enshittification of AI chats. I can't wait for the bots to start recommending products and services of the highest bidder.
- MontyCarloHall 1y agoI also wonder if this means that even paid tiers will get ads. Google's ad revenue is only ~$30 per user per year, yet there is no paid, ad-free Google Premium, even though lots of users would gladly pay way more than $30/year have an ad-free experience. There's no Google Premium because Google's ad revenue isn't uniformly distributed across users; it's heavily skewed towards the wealthiest users, exactly the users most likely to purchase an ad-free experience. In order to recoup the lost ad revenue from those wealthy users, Google would have to charge something exorbitant, which nobody would be willing to pay. I fear the same will happen with chatbots. The users paying $20 or $200/month for premium tiers of ChatGPT are precisely the ones you don't want to exclude from generating ad revenue.
- m11a 1y agoI’d agree. The biggest exception I can think of is X, which post-Musk has plans to reduce/remove ads. Though I don’t know how much this tanked their ad revenue and whether it was worth it.
- psadri 1y agoThe average is $x. But that's global which means in some places like the US it is 10x. And in other less wealthy areas it is 0.1x. There is also the strange paradox that the people who are willing to pay are actually the most desirable advertising targets (because they clearly have $ to spend). So my guess is that for that segment, the revenue is 100x.
- josvdwest 1y agoPretty sure the reason they don't have a paid tier is because engagement (and results) is better when you include ads. Like Facebook found in the early days
- grogers 1y agoWhy would it be any different for youtube premium? I think Google just doesn't think enough people will pay for ad-free search, not that it would cannibalize their ad revenue.
- 1y ago
- throwaway2037 1y ago> They generated $4.3B in revenue without any advertising program To be clear, they bought/aired a Superbowl advert. That is a pretty expensive. You might argue that "Superbowl advert" versus 4B+ in revenue is inconsequential, but you cannot say there is no advertising. Also, their press release said: > $2 billion spent on sales and marketing Vague. Is this advertising? Eh, not sure, but that is a big chunk of money.
- NotMichaelBay 1y agoI think they mean OpenAI showing ads from other companies to users, not buying ads themselves.
- Thaxll 1y agoGoogle has google.com, youtube, chrome, android, gmail, google map etc ... I don't see OpenAI having a product close to that.
- wslh 1y agoGoogle is older and many of the products you describe were acquisitions (inorganic growth).
- Workaccount2 1y agoBy this point I imagine it's a novelty to find any code from the original acquisition in those products.
- returnInfinity 1y agoCode is secondary. Pmf is primary. Code is a commodity. Very easy to make. Now even llms are commodities. There are other intangible assets more valuable. Like the chatgpt brand here.
- wslh 1y agoThis is beyond PMF, it's about traction on steroids, owning the last mile.
- vitus 1y ago> google.com, youtube, chrome, android, gmail, google map etc Of those, it's 50/50. The acquisitions were YT, Android, Maps. Search was obviously Google's original product, Chrome was an in-house effort to rejuvenate the web after IE had caused years of stagnation, and Gmail famously started as a 20% project. There are of course criticisms that Google has not really created any major (say, billion-user) in-house products in the past 15 years.
- ppseafield 1y agoChrome's engine was WebKit originally, which they then forked. Not an acquisition, but benefitted greatly from prior work.
- hoppp 1y agoThe moment they start mixing ads into responses Ill stop using them. Open models are good enough, its just more convenient to use chatgpt right now, but that can change.
- beeflet 1y agoI agree, but the question is whether or not normal people will stop using them.
- _aavaa_ 1y agoI think the empirical answer is no. Look at how many ads there are in everything and people still use it.
- ipaddr 1y agoNormal people ignore ads. It gets easier with time. Television with ads means conversation about what we just watched.
- wiseowise 1y agoExcept you won’t be able to ignore ads if Chat doesn’t explicitly state that 5 of 10 suggested products are ads.
- _aavaa_ 1y agoI don’t think that’s true. For starters, I doubt all (or even most) of Google’s ad revenue is from fraud or from people clicking links they ignore. I doubt people ignore sponsored listings on Amazon.
- glenneroo 1y agoHow do you ignore ads when you ask for a recipe and it suggests using <insert brand-name here> ingredients, due to their superior flavors, textures, ability to mesh with the other ingredients, etc? Sure, you can decide to go with another brand, but over time, that stuff has the ability to stick in your brain. There have been many billions sunk into how to psychologically manipulate humans to get them to come buy your products, for instance McDs figured out decades ago through research that by giving away free toys in children's meals, the kids will whine and pester parents after seeing a commercial for a new toy from the latest superhero movie they just saw. Some parents will say no, but enough parents, after a long day/week of working will just give in. Sure my example of asking for a recipe is contrived but imagine that for every query you make, that AI suggests using this framework for your web development, or basically any query you can think of will make subtle suggestions to use a specific product with compelling reasons why e.g. the competition has known bugs that will affect you personally! The possibilities are endless.
- asa400 1y agoWhat is OpenAI's competitive moat? There's no product stickiness here. What prevents people from just using Google, who can build AI stuff into their existing massive search/ads/video/email/browser infrastructure? Normal, non-technical users can't tell the difference between these models at all, so their usage numbers are highly dependent on marketing. Google has massive distribution with world-wide brands that people already know, trust, and pay for, especially in enterprise. Google doesn't have to go to the private markets to raise capital, they can spend as much of their own money as they like to market the living hell out of this stuff, just like they did with Chrome. The clock is running on OpenAI. At some point OpenAI's investors are going to want their money back. I'm not saying Google is going to win, but if I had to bet on which company's money runs out faster, I'm not betting against Google.
- fspeech 1y agoChats have contexts. While search engines try to track you it is spookier because it is unclear to the user how the contexts are formed. In chats at least the contexts are transparent to both the provider and the user.
- rajaman0 1y agoConsumer brand quality is so massively underrated by tech people. ChatGPT has a phenomenal brand. That's worth 100x more than "product stickiness". They have 700 million weekly users and growing much faster than Google. I think your points on Google being well positioned are apt for capitalization reasons, but only one company has consumer mindshare on "AI" and its the one with "ai" in its name.
- sharkweek 1y agoI’ve got “normie” friends who I’d bet don’t even know that what Google has at the top of their search results is “AI” results and instead assume it’s just some extension of the normal search results we’ve all gotten used to (knowledge graph) Every one of them refers to using “ChatGPT” when talking about AI. How likely is it to stay that way? No idea, but OpenAI has clearly captured a notable amount of mindshare in this new era.
- zahlman 1y ago> $264B in 2024. Why is this much money spent on advertising? Surely it isn't really justified by increase in sales that could be attributed to the ads? You're telling me people actually buy these ridiculous products I see advertised?
- returnInfinity 1y agoIt's a lot more complicated, but yes advertising works. There is a saying in India, whats seen is what is sold. Not the hidden best product.
- ipaddr 1y agoA lot of that money comes from search result ads. Sometimes I click on an ad to visit a site I search for instead of scrolling to the same link in the actual search results. Many companies bid on keywords for their own name to prevent others from taking a customer who is interested in you. You use to be a useful site and be at the top of the search results for some keywords and now you have to pay.
- HeatrayEnjoyer 1y agoYes, they do. Advertising works. "Free with ads" isn't really free because on average you'll end up spending more money than you would otherwise. You're also paying more than if it was a subscription because the producer has to create both the product and also advertise it.
- theshackleford 1y agoI work/have worked ecom adjacent for a long time. Ads absolutely work and the continued bewilderment of HN users to this reality will never cease to amaze me.
- majormajor 1y agoIf they overnight were able to capture as much revenue per user as Meta (about 50 bucks a year) they'd bring in a bucket of cash immediately. But selling that much ad inventory overnight - especially if they want new formats vs "here's a video randomly inserted in your conversation" sorta stuff - is far from easy. Their compute costs could easily go down as technology advances. That helps. But can they ramp up the advertising fast enough to bring in sufficient profit before cheaper down-market alternatives become common? They lack the social-network lock-in effect of Meta, or the content of ESPN, and it remains to be seen if they will have the "but Google has better results than Bing" stickiness of Google.
- outside1234 1y agoThe problem with this is that I have moved to Gemini with zero loss in functionality, and I’m pretty sure that Google is 100x better at ads than OpenAI.
- crystal_revenge 1y ago> ads in the future. It boggles my mind that people still think advertising can be a major part of the economy. If AI is propping up the economy right now [0] how is it possible that the rest of the economy can possibly fund AI through profit sharing? That's fundamentally what advertising is: I give you a share of my revenue (hopefully from profits) in order to help increase my market share. The limit of what advertising spend can be is percent of profits minus some epsilon (for a functioning economy at least). Advertising cannot be the lions share of any economy because it derives it's value from the rest of the economy. Advertising is also a major bubble because my one assumption there (that it's a share of profits) is generally not the case. Unprofitable companies giving away a share of their revenue to other companies making those companies profitable is not sustainable. Advertising could save AI if AI was a relatively small part of the US (or world) economy and could benefit by extracting a share of the profits from other companies. But if most your GDP is from AI how can it possibly cannibalize other companies in a sustainable way? 0. https://www.techspot.com/news/109626-ai-bubble-only-thing-keeping-us-economy-together.html https://www.techspot.com/news/109626-ai-bubble-only-thing-ke...
- lemonlearnings 1y agoUS GDP is 30T so that revenue is less than 1% of it. But 1% of GDP us still eye popping amount. But remember in the non Google world that is split up into Yellow Pages and TV ads and etc. and possibly many ventures that were not possible because of lack of targeted ads didnt come to fruition.
- StopHammoTime 1y agoYou've run a false equivalency in your argument. Growth is not representative of the entire economy. The economy is, in aggregate, much more than tech - they have the biggest public companies which skews how people think. No exclusive sector makes up "most" of the economy, in fact the highest sector, which is finance only makes up 21% of the US economy. https://www.statista.com/statistics/248004/percentage-added-to-the-us-gdp-by-industry/ https://www.statista.com/statistics/248004/percentage-added-...
- 1y ago
- StarterPro 1y agoIts a completely optional purchase, and there's no clear way for ads to be included without it muddying up the actual answer. "The most popular brand of bread in America is........BUTTERNUT (AD)" Its a sinkhole that they are destroying our environment for. Its not sustainable on a massive scale, and I expect to see Sam Altman join his 30 under 30 cohorts SBF and such eventually.
- raw_anon_1111 1y agoWhy do people always think that just because you have a lot of users it automatically translates to ad revenue? Yahoo has been one of the most trafficked site for decades and could never generate any reasonable amount of ad revenue. The other side of the coin is that running an LLM will never be as cheap as search engine.
- davedx 1y ago> running an LLM will never be as cheap as search engine. Complete and unfounded speculation.
- raw_anon_1111 1y agoReally? You think that they are going to discover some magical algorithm that reduces the complexity of an LLM to a search?
- davedx 1y agoNo, I just think it's outlandish to claim LLM's will never be as efficient as the search infrastructure companies like Google use. How can you possibly know that?
- raw_anon_1111 1y agoBecause the complexity an algorithms required to do search are a lot less than to run an LLM. Google ran well on 2000 level hardware. Could you run an LLM on 2000 level hardware? Are GPUs and equivalent hardware going to get as simple as CPUs
- lelanthran 1y agoGoogle is tightly integrated vertically. It is going to be very hard to dislodge that. Right now Gemini gives a youtube link in every response. That means they have already monetised their product using ads.
- ares623 1y ago> ChatGPT has more consumer trust than Google at this point Gee I wonder why?
- mrweasel 1y ago> ChatGPT has more consumer trust than Google at this point That trust is gone the moment they start selling ad space. Where would they put the ads? In the answers? That would force more people to buy a subscription, just to avoid having the email to your boss contain a sponsored message. The numbers for Q2 looks promising, sells are going up. And speaking of sales, Jif peanut butter is on sale this week. If OpenAI plan on making money with ads then all the investments made by Nvidia, Microsoft and Softbank starts to look incredibly stupid. Smartest AI in the world, but we can only make money by showing you gambling ads.
- morsch 1y agoI'm afraid there's plenty of avenues for them to insert ads that probably won't be perceived as obnoxious by most people (I still find it incredibly obnoxious). About half of AI queries are "Asking" (as opposed to Doing or Expressing) and those are the ones best suited for ads. User asking how to make pizza? Show ads for baking steels and premium passata. User asking for a three day sightseeing routine in Rome? I'm sure someone will pay you them to show their venue. It seems unlikely that the ads will be embedded directly into the answer stream, unless they find a way to reliably label such portions as advertisements in a "clear and conspicuous" way, or convince law makers/regulators that chat bots don't need to be held to the same standards as other media.
- thorio 1y agoI think affiliation is much more likely to be a relevant revenue stream for them in the future. Instant checkouts would be a game changer in my view. Especially for upcoming generations, that don't have the habit of scrolling the open web to get their stuff done, but are native to LLMs.
- iLoveOncall 1y ago> ChatGPT has more consumer trust than Google at this point This is just HackerNews bias. Everyone that has used ChatGPT (or any other LLM really) has already been burnt by being provided a completely false answer. On the contrary everyone understands that Google never claimed to provide a true answer, just links to potential answers.
- belter 1y agoSo they are losing money but will make it on volume? :-)
- devops000 1y agoOne of the feature of ChatGPT is that because there are no ads and you got straight to the information you need. If you add ads again it is all over again. You still have traction but it will not be so extraordinary and Google could do the same. OpenAI must have a difference from Google.
- 0xDEAFBEAD 1y ago>ChatGPT has more consumer trust than Google at this point "There are increasing reports of people having delusional conversations with chatbots. This suggests that, for some, the technology may be associated with episodes of mania or psychosis when the seemingly authoritative system validates their most off-the-wall thinking. Cases of conversations that preceded suicide and violent behavior, although rare, raise questions about the adequacy of safety mechanisms built into the technology." https://www.nytimes.com/2025/08/26/technology/chatgpt-openai-suicide.html https://www.nytimes.com/2025/08/26/technology/chatgpt-openai...
- t_sawyer 1y agoGoogle already has the ad network. They already have Gemini. IMO this will end up being OpenAI proving that the revenue model works and then Google will swoop in and take their market share away.
- ksec 1y agoI am surprised something about Ads on HN is not downvoted into oblivion but actually top upvoted comment. The pendulum is swinging back indeed!
- netdevphoenix 1y ago> I think people are massively underestimating the money they will come from ads in the future. The future will never come to pass if they do not exist at that point in time. They still need to survive all the way there wherever THERE is