6 ms·

Less than two years ago, Sam Altman said > I kind of think of ads as a last resort for us for a business model. I would do it if it meant that was the only way

Less than two years ago, Sam Altman said > I kind of think of ads as a last resort for us for a business model. I would do it if it meant that was the only way to get everybody in the world access to great services, but if we can find something that doesn't do that, I'd prefer that. So, is this OpenAI announcing they're strapped for cash?

nerptastic 5mo ago
Well - I think the writing was on the wall when they announced they were going to be for-profit. Slippery slope and all that, but I’m sure some of this is because they’ve been giving out free tokens for years.
- dnnddidiej 5mo ago
  Even as a not for profit they would need cashflow.
  - tombert 5mo ago
    Yes but they would only need enough to keep the lights on and pay the engineers. When you're a for-profit company, especially a public one (which I believe they're looking to be soon), you can't just maintain homeostasis. Your investors want growth every quarter. Conceivably if they stayed non-profit then they could charge just enough to maintain the project, and they wouldn't necessarily have to have ads.
    - dnnddidiej 5mo ago
      The lights being billions in hardware and plant investment, possibly power generation and operations and maintenance, attracting and retaining top 0.01% of engineers. In addition if you don't keep up with SOTA +/- 10% you instantly lose all customers. There is zero stickiness.
      - tombert 5mo ago
        Sure. That still is different than expecting 10-15% yearly growth like publicly traded companies are.
bitvvip 5mo ago
Who can resist the temptation of profit? One always has to make money
- bitmasher9 5mo ago
  If I say “Doing X is a last resort” and then I’m caught doing X, it should raise some eyebrows about my level of desperation. It’s not that OpenAI is trying to raise revenues that bothers me, it’s how they are doing things that said was desperate just a couple years ago.
  - bonesss 5mo ago
    > Desperation You’re right on the core of the issue. I think there has been some temporal stripping of context: that ‘last resort’ needs to be considered against their alternatives. OpenAI isn’t a business scaling a popular website to profitability, that’s Reddit or Slashdot. OpenAI was promising revolutionary product technology that was breathlessly close to AGI and would eliminate positions and automate coding and, and, and… Having your next-gen AGI do-it-all platform mature into hoping to recreate the business model of Reddit should raise eyebrows, and let everyone know about the state of The Emperors wardrobe. They could be building an Office killer and consumer oriented OS’s & ecosystem for near infinite money… they are running ads. Ads for porn and dick pills? Not yet, that’d be another last resort.
- bluefirebrand 5mo ago
  Tons of people can resist the temptation, but they aren't likely to be the sort of person that gets put in a role like where Altman is
sayYayToLife 5mo ago
[dead]
jimmygrapes 5mo ago
Charitably, it seems that we have yet to find, as a species/society, anything more effectively profitable than ads. I cannot blame those who come to this conclusion so long as no more powerful and proven motivator yet exists. I hate it, but I understand.
- LtWorf 5mo ago
  I think ads are just overpriced and companies do not really get that return. But marketing people have no metrics to show that.
mh- 5mo ago
That's not how I read that sentence at all. Maybe I've just been speaking VC for too long. What he meant was: "I'm going to get everybody in the world access to great services. Doing so means monetizing somehow. Ads will be the last way I chose to do that, but I will if it's the only way I can figure out how to achieve that goal."
- normie3000 5mo ago
  You've said the same thing. > Ads will be the last way I chose to do that The implication is that they've exhausted all other options.
  - mh- 5mo ago
    I haven't said the same thing as the parent commenter: > So, is this OpenAI announcing they're strapped for cash? It by no means conveys that. It means they haven't figured out another way to monetize something they want to do; it indicates nothing about their financial situation. It means they don't want to sell something at a loss perpetually while they figure it out.
    - Dylan16807 5mo ago
      Being forced into something you don't want to do, to stop selling at a loss... I would categorize that as some level of strapped for cash.
      - mh- 5mo ago
        You realize we're talking about a product that is currently free, right? Neither of us have any insight into the margins of their paid offering. All this means is: we have a free offering that we can't figure out another way to monetize right now. We can each draw our own conclusions about what that might mean for the state of their business, but all of the other inferences (ha) in this thread are conjecture.
        5mo ago
Aurornis 5mo ago
The ads are for the free tier and new $8 ad-supported plan. The revenue from a few ads on the free tier in exchange for limited queries to GPT-5.3 is negligible compared to what they pull in from API costs and the subscription plans. This looks like a play to justify the existence of the previously money-losing free tier as they go into an IPO. Throw some ads in there to make it closer to a neutral on the balance sheet. The key part of that quote was "everybody in the world". The ads are their way of sustaining the low end of the access.
- giancarlostoro 5mo ago
  > The ads are for the free tier and new $8 ad-supported plan. Dang. > The revenue from a few ads on the free tier in exchange for limited queries to GPT-5.3 is negligible compared to what they pull in from API costs and the subscription plans. This looks like a play to justify the existence of the previously money-losing free tier as they go into an IPO. Throw some ads in there to make it closer to a neutral on the balance sheet. Yeah, I guess this time around Sam Altman can't be lying about how many Monthly Active Users he has.
- kingstnap 5mo ago
  The real question is what do you get out of advertising to people who don't have any money? Kinda squeezing blood from a stone. You'd be better off saying you use those people to A/B test changes and filling idle GPU batches while giving paying customers a more consistent experience.
  - ldoughty 5mo ago
    A bunch of people pay to remove ads, and a bunch of people that are happy to give businesses their attention (view ads) I'm exchange for services... I.e. Gmail, YouTube, but don't feel they use enough / are annoyed enough to warrant $15-25/month. Some brands are okay with impressions.. you can build trust in your product be advertising it for weeks/months and when the user does make a purchase that brand is on the mind.
  - troyvit 5mo ago
    > The real question is what do you get out of advertising to people who don't have any money? Psychographic data. What they learn from these folks will create the most powerful manipulation technology yet.
whatisthiseven 5mo ago
Sam Altman is the guy fired for lying. Why believe what he claims?
holotherapper 5mo ago
"last resort" doing some heavy lifting in that quote.
staticshock 5mo ago
Feels to me like idealism crossing into realism. OpenAI could be the next Google, or the next Facebook, or the next… I don't know, Netflix? All those companies (and many other large tech companies) have discovered the same arbitrage that older media companies discovered decades ago, which is that we, on the average, are much more willing to pay with attention than with money, even where money would have been the better choice. Advertising continues to be one of the most powerful business models ever invented, and I don't think that's changing any time soon.
- plemer 5mo ago
  Altman is an idealist? I read this as: I know ads are likely if not inevitable but I can’t say that while I’m trying to gain users and inspire trust but I’ll start to float even in this non-denial the justification for the thing I’m ultimately going to do.
  - nine_k 5mo ago
    Altman wanting to look idealistic and inspiring. See it as a brand image advertising campaign of the time.
  - michaelt 5mo ago
    The ideal is "It would be ideal if everyone on the planet voluntarily paid me $20/month" Most billionaires are idealists when it comes to this one particular ideal.
  - tovej 5mo ago
    The opposite of an idealist is a materialist. The opposite of an ideologue is a pragmatist. In this sense I think Altman is an idealist, he concerns himself primarily with ideas, not so much with material reality.
    - threepts 5mo ago
      I think these binary labels are too simple to describe him.
programjames 5mo ago
I think you're missing that Sam Altman is very smart. If OpenAI really were on the verge of becoming massively profitable due to their next-gen AI, he would not want that information leaking. If Sam Altman acts differently in the world where profits are on the horizon, that information leaks prematurely. Thus, he has to act as if OpenAI is strapped for cash, whether or not it is. The keyword is "glamorization": https://www.lesswrong.com/w/consistent-glomarization https://www.lesswrong.com/w/consistent-glomarization
- largbae 5mo ago
  This reads similar to the Trump 4D chess excuse. It seems unlikely that this is a ruse, and much more likely that OpenAI's market cap is supported by doing "all the things" to exploit the huge monthly average user base that OpenAI has accumulated.
- HWR_14 5mo ago
  I would just assume that they were still spending VC money to lock in users if nothing happened. I would not assume "AI is about to make money obsolete"
m463 5mo ago
more like "Sam Altman said"
danparsonson 5mo ago
No, I suspect that "I kind of think of ads as a last resort" was doublespeak for "ads are coming eventually". I would tend to think of someone like him as a person who uses words to achieve a specific goal, rather than someone who speaks whatever is truly on their mind. Whether those words are lies or truth or somewhere in between is irrelevant; what matters to them is the outcome. It's likely a waste of time trying to unpick the meaning, because there is none. "But Sam Altman said..." to me has about as much value as "ChatGPT told me...".
- kakacik 5mo ago
  Exactly this. Words are cheap these days, people do say various things to further their goals. Days where leaders stood by their words as sort of moral testament of their character are gone, probably for good. As we see many people will do or say just about anything to get more money, prestige or power.
  - gleenn 5mo ago
    So what is the best system to get people to be invested in the general welfare of all people? What are we supposed to do?
    - Antibabelic 5mo ago
      Some problems don't have solutions.
      - customguy 5mo ago
        This one does though. These issues are solely created by humans, so of course humans can solve them, that's not even a question. People who care need to keep speaking up and reaching out to each other, get together; and by doing so expose the people who don't care, or actively are against the general welfare of humans, like rocks on the beach when the tide recedes. It takes so much work, so much criminal energy, so much money and campaigns, to divide people. Whereas the opposite, people getting to know each other and working together, happens "by itself" all the time, for the most banal of reasons. Just give them some time and space together; no lobbying required, no bribes or blackmail, no psy-ops; just our innate desire to live and let live. Humans who prey on humans are sick, it's as simple as that. Humans who don't want to stand up to humans who prey on humans may not be sick, but they're not our best, that's for sure, and they must not be our gatekeepers or our compass.
utopiah 5mo ago
For somebody so smart, surrounding by people so brilliant, in the very heart of the Silicon Valley, and somehow not learning from the 1 startup that become one of the largest corporations even, namely Google, is a pretty dumb move. Context : Brin/Page said the same, they didn't like nor want ads, only if it was the last resort. Well, guess which World we all live in now.
gbin 5mo ago
Oh no ... Sweet summer child. Whatever the revenue is, whatever profit there is, whatever cash buffer any corporate has, you can be sure of one thing: they need this to go up and to the right... It became almost a perfect science to optimize your behavior: this is why you end up, bit by bit with enshitiffied products all around you where basically the pain of using that product is just at the threshold of you actually bashing it against the wall. ChatGPT is just one of them, like Google search, your TV serving ads or ...
swaritshukla 5mo ago
I also remember him saying that on ig lex friedman podcast. In my opinion, they will only try this on a handful of users and see if it works out or not, just like Anthropic removed Claude code from the pro plan for a very small percentage of users just for testing purposes. It will all boil down to how people respond to the ads rollout.
shevy-java 5mo ago
Or, Sam did not speak the truth back then, and always had ads in his mind. I think that was the strategy from the get go.
pandini 5mo ago
BREAKING : Man changes mind.
- aaa_aaa 5mo ago
  He did not. He was/is a liar.
eleveriven 5mo ago
The uncomfortable part is that "ads as a last resort" sounds very different once the product becomes one of the main places people ask for advice
andai 5mo ago
Well, they want to give everyone access for free. That's very explicitly their mission. We don't seem to have invented a way of doing that which isn't ads. Hence, every other online platform. ...Except this one, which is funded by... benevolence? :) Come to think of it, Archive.org and Wikipedia also seem to have found a way. I don't think that model scales to "free LLM for everyone" though, at least not for another decade or two.

nerptastic 5mo ago

Well - I think the writing was on the wall when they announced they were going to be for-profit. Slippery slope and all that, but I’m sure some of this is because they’ve been giving out free tokens for years.

dnnddidiej 5mo ago
Even as a not for profit they would need cashflow.
- tombert 5mo ago
  Yes but they would only need enough to keep the lights on and pay the engineers. When you're a for-profit company, especially a public one (which I believe they're looking to be soon), you can't just maintain homeostasis. Your investors want growth every quarter. Conceivably if they stayed non-profit then they could charge just enough to maintain the project, and they wouldn't necessarily have to have ads.
  - dnnddidiej 5mo ago
    The lights being billions in hardware and plant investment, possibly power generation and operations and maintenance, attracting and retaining top 0.01% of engineers. In addition if you don't keep up with SOTA +/- 10% you instantly lose all customers. There is zero stickiness.
    - tombert 5mo ago
      Sure. That still is different than expecting 10-15% yearly growth like publicly traded companies are.

bitvvip 5mo ago

Who can resist the temptation of profit? One always has to make money

bitmasher9 5mo ago
If I say “Doing X is a last resort” and then I’m caught doing X, it should raise some eyebrows about my level of desperation. It’s not that OpenAI is trying to raise revenues that bothers me, it’s how they are doing things that said was desperate just a couple years ago.
- bonesss 5mo ago
  > Desperation You’re right on the core of the issue. I think there has been some temporal stripping of context: that ‘last resort’ needs to be considered against their alternatives. OpenAI isn’t a business scaling a popular website to profitability, that’s Reddit or Slashdot. OpenAI was promising revolutionary product technology that was breathlessly close to AGI and would eliminate positions and automate coding and, and, and… Having your next-gen AGI do-it-all platform mature into hoping to recreate the business model of Reddit should raise eyebrows, and let everyone know about the state of The Emperors wardrobe. They could be building an Office killer and consumer oriented OS’s & ecosystem for near infinite money… they are running ads. Ads for porn and dick pills? Not yet, that’d be another last resort.
bluefirebrand 5mo ago
Tons of people can resist the temptation, but they aren't likely to be the sort of person that gets put in a role like where Altman is

sayYayToLife 5mo ago

[dead]

jimmygrapes 5mo ago

Charitably, it seems that we have yet to find, as a species/society, anything more effectively profitable than ads. I cannot blame those who come to this conclusion so long as no more powerful and proven motivator yet exists. I hate it, but I understand.

LtWorf 5mo ago
I think ads are just overpriced and companies do not really get that return. But marketing people have no metrics to show that.

mh- 5mo ago

That's not how I read that sentence at all. Maybe I've just been speaking VC for too long. What he meant was: "I'm going to get everybody in the world access to great services. Doing so means monetizing somehow. Ads will be the last way I chose to do that, but I will if it's the only way I can figure out how to achieve that goal."

normie3000 5mo ago
You've said the same thing. > Ads will be the last way I chose to do that The implication is that they've exhausted all other options.
- mh- 5mo ago
  I haven't said the same thing as the parent commenter: > So, is this OpenAI announcing they're strapped for cash? It by no means conveys that. It means they haven't figured out another way to monetize something they want to do; it indicates nothing about their financial situation. It means they don't want to sell something at a loss perpetually while they figure it out.
  - Dylan16807 5mo ago
    Being forced into something you don't want to do, to stop selling at a loss... I would categorize that as some level of strapped for cash.
    - mh- 5mo ago
      You realize we're talking about a product that is currently free, right? Neither of us have any insight into the margins of their paid offering. All this means is: we have a free offering that we can't figure out another way to monetize right now. We can each draw our own conclusions about what that might mean for the state of their business, but all of the other inferences (ha) in this thread are conjecture.
      - 5mo ago

Aurornis 5mo ago

The ads are for the free tier and new $8 ad-supported plan. The revenue from a few ads on the free tier in exchange for limited queries to GPT-5.3 is negligible compared to what they pull in from API costs and the subscription plans. This looks like a play to justify the existence of the previously money-losing free tier as they go into an IPO. Throw some ads in there to make it closer to a neutral on the balance sheet. The key part of that quote was "everybody in the world". The ads are their way of sustaining the low end of the access.

giancarlostoro 5mo ago
> The ads are for the free tier and new $8 ad-supported plan. Dang. > The revenue from a few ads on the free tier in exchange for limited queries to GPT-5.3 is negligible compared to what they pull in from API costs and the subscription plans. This looks like a play to justify the existence of the previously money-losing free tier as they go into an IPO. Throw some ads in there to make it closer to a neutral on the balance sheet. Yeah, I guess this time around Sam Altman can't be lying about how many Monthly Active Users he has.
kingstnap 5mo ago
The real question is what do you get out of advertising to people who don't have any money? Kinda squeezing blood from a stone. You'd be better off saying you use those people to A/B test changes and filling idle GPU batches while giving paying customers a more consistent experience.
- ldoughty 5mo ago
  A bunch of people pay to remove ads, and a bunch of people that are happy to give businesses their attention (view ads) I'm exchange for services... I.e. Gmail, YouTube, but don't feel they use enough / are annoyed enough to warrant $15-25/month. Some brands are okay with impressions.. you can build trust in your product be advertising it for weeks/months and when the user does make a purchase that brand is on the mind.
- troyvit 5mo ago
  > The real question is what do you get out of advertising to people who don't have any money? Psychographic data. What they learn from these folks will create the most powerful manipulation technology yet.

whatisthiseven 5mo ago

Sam Altman is the guy fired for lying. Why believe what he claims?

holotherapper 5mo ago

"last resort" doing some heavy lifting in that quote.

staticshock 5mo ago

Feels to me like idealism crossing into realism. OpenAI could be the next Google, or the next Facebook, or the next… I don't know, Netflix? All those companies (and many other large tech companies) have discovered the same arbitrage that older media companies discovered decades ago, which is that we, on the average, are much more willing to pay with attention than with money, even where money would have been the better choice. Advertising continues to be one of the most powerful business models ever invented, and I don't think that's changing any time soon.

plemer 5mo ago
Altman is an idealist? I read this as: I know ads are likely if not inevitable but I can’t say that while I’m trying to gain users and inspire trust but I’ll start to float even in this non-denial the justification for the thing I’m ultimately going to do.
- nine_k 5mo ago
  Altman wanting to look idealistic and inspiring. See it as a brand image advertising campaign of the time.
- michaelt 5mo ago
  The ideal is "It would be ideal if everyone on the planet voluntarily paid me $20/month" Most billionaires are idealists when it comes to this one particular ideal.
- tovej 5mo ago
  The opposite of an idealist is a materialist. The opposite of an ideologue is a pragmatist. In this sense I think Altman is an idealist, he concerns himself primarily with ideas, not so much with material reality.
  - threepts 5mo ago
    I think these binary labels are too simple to describe him.

programjames 5mo ago

I think you're missing that Sam Altman is very smart. If OpenAI really were on the verge of becoming massively profitable due to their next-gen AI, he would not want that information leaking. If Sam Altman acts differently in the world where profits are on the horizon, that information leaks prematurely. Thus, he has to act as if OpenAI is strapped for cash, whether or not it is. The keyword is "glamorization": https://www.lesswrong.com/w/consistent-glomarization https://www.lesswrong.com/w/consistent-glomarization

largbae 5mo ago
This reads similar to the Trump 4D chess excuse. It seems unlikely that this is a ruse, and much more likely that OpenAI's market cap is supported by doing "all the things" to exploit the huge monthly average user base that OpenAI has accumulated.
HWR_14 5mo ago
I would just assume that they were still spending VC money to lock in users if nothing happened. I would not assume "AI is about to make money obsolete"

m463 5mo ago

more like "Sam Altman said"

danparsonson 5mo ago

No, I suspect that "I kind of think of ads as a last resort" was doublespeak for "ads are coming eventually". I would tend to think of someone like him as a person who uses words to achieve a specific goal, rather than someone who speaks whatever is truly on their mind. Whether those words are lies or truth or somewhere in between is irrelevant; what matters to them is the outcome. It's likely a waste of time trying to unpick the meaning, because there is none. "But Sam Altman said..." to me has about as much value as "ChatGPT told me...".

kakacik 5mo ago
Exactly this. Words are cheap these days, people do say various things to further their goals. Days where leaders stood by their words as sort of moral testament of their character are gone, probably for good. As we see many people will do or say just about anything to get more money, prestige or power.
- gleenn 5mo ago
  So what is the best system to get people to be invested in the general welfare of all people? What are we supposed to do?
  - Antibabelic 5mo ago
    Some problems don't have solutions.
    - customguy 5mo ago
      This one does though. These issues are solely created by humans, so of course humans can solve them, that's not even a question. People who care need to keep speaking up and reaching out to each other, get together; and by doing so expose the people who don't care, or actively are against the general welfare of humans, like rocks on the beach when the tide recedes. It takes so much work, so much criminal energy, so much money and campaigns, to divide people. Whereas the opposite, people getting to know each other and working together, happens "by itself" all the time, for the most banal of reasons. Just give them some time and space together; no lobbying required, no bribes or blackmail, no psy-ops; just our innate desire to live and let live. Humans who prey on humans are sick, it's as simple as that. Humans who don't want to stand up to humans who prey on humans may not be sick, but they're not our best, that's for sure, and they must not be our gatekeepers or our compass.

utopiah 5mo ago

For somebody so smart, surrounding by people so brilliant, in the very heart of the Silicon Valley, and somehow not learning from the 1 startup that become one of the largest corporations even, namely Google, is a pretty dumb move. Context : Brin/Page said the same, they didn't like nor want ads, only if it was the last resort. Well, guess which World we all live in now.

gbin 5mo ago

Oh no ... Sweet summer child. Whatever the revenue is, whatever profit there is, whatever cash buffer any corporate has, you can be sure of one thing: they need this to go up and to the right... It became almost a perfect science to optimize your behavior: this is why you end up, bit by bit with enshitiffied products all around you where basically the pain of using that product is just at the threshold of you actually bashing it against the wall. ChatGPT is just one of them, like Google search, your TV serving ads or ...

swaritshukla 5mo ago

I also remember him saying that on ig lex friedman podcast. In my opinion, they will only try this on a handful of users and see if it works out or not, just like Anthropic removed Claude code from the pro plan for a very small percentage of users just for testing purposes. It will all boil down to how people respond to the ads rollout.

shevy-java 5mo ago

Or, Sam did not speak the truth back then, and always had ads in his mind. I think that was the strategy from the get go.

pandini 5mo ago

BREAKING : Man changes mind.

aaa_aaa 5mo ago
He did not. He was/is a liar.

eleveriven 5mo ago

The uncomfortable part is that "ads as a last resort" sounds very different once the product becomes one of the main places people ask for advice

andai 5mo ago

Well, they want to give everyone access for free. That's very explicitly their mission. We don't seem to have invented a way of doing that which isn't ads. Hence, every other online platform. ...Except this one, which is funded by... benevolence? :) Come to think of it, Archive.org and Wikipedia also seem to have found a way. I don't think that model scales to "free LLM for everyone" though, at least not for another decade or two.