So, how do their overall financials look these days?
Will Locket wrote about it last month: https://www.planetearthandbeyond.co/p/openai-is-in-a-far-wor... tldr is: They either get a successful IPO to stave off bankruptcy for a couple more months, or they're going to be bankrupt by the beginning of next year.
Or they stay private and raise more capital. Until they have a failed round people predicting bankruptcy are getting way ahead of how this would actually play out. Some of us are old enough to remember the "Amazon can never make a profit and will go bankrupt" predictions of 25 years ago.
Emarketer’s data finds that standalone chatbots like ChatGPT, Microsoft Copilot app, Google AI Mode, and Amazon Alexa for Shopping (formerly Rufus) in U.S, will generate less than $1 billion in ad revenue this year, and just $5.41 billion by 2030. How would that be possible? In the past I used Google maybe 10 times a day with a short query. From which Google had to guess my intent. Now I babble with Gemini all day ab…
Because writing a headline with 90% miss in it will get more clicks than actually thinking through business strategy and realistic projections.
The same kind of speculation questioned whether Facebook would ever have a significant business. Before that, the same was asked about Google's business.
If GPT can maintain or grow usage, the ad dollars will be there given the enormous scale. There is a hundred billion dollars plus worth of advertising waiting in the LLM space. It would be surprising if Facebook doesn't contract for example, losing ground to LLMs on advertising over the coming decade.
Because writing a headline with 90% miss in it will get more clicks than actually thinking through business strategy and realistic projections.
The same kind of speculation questioned whether Facebook would ever have a significant business. Before that, the same was asked about Google's business. If GPT can maintain or grow usage, the ad dollars will be there given the enormous scale. There is a hundred billion dollars plus worth of advertising waiting in the LLM space. It would be surprising if Facebook doesn't contract for example, losing ground to LLMs on…
They have to build out all the backend ad tech crap that google and fb have built over decades. As in the campaign tools, scheduling, targeting, analytics, auctions, exchanges etc. Advertisers and publishers have already deeply integtated into that eco system. Also the google and fb system has created a content generating army that is incentivized to fight tooth and nail for eyeballs. OpenAI doesnt reduce the activities of the eyeball capture army, it just freaks them out and pushes them into overdrive.
Ignoring whether or not OpenAI can reach this, do we think a massive expansion of ad revenue is fruit of the poisonous tree for GPTs? Does anyone want to use a tool that is capable of disguising an ad as a geniune recommendation at anytime? I suppose if the platforms become super entrenched and we boil slowly then they'll get away with it
The ad business will never die. It’s capitalisms air and water.
True, but the current state of advertising is, charitably, kinda goofy. I'm not surprised the iteration we're seeing now is perceived as failing: on the few remaining screens where ads are still present for me, they're between highly irrelevant to flat out repulsive. There are a few brands I will never touch with a long stick, purely as a result of their disturbing, disgusting ads -- again, charitably, a negative-sum…
As someone who doesnt really see ads either, we are in the minority. The vast majority of people are bombarded with ads from their TVs, streaming platforms, and unadblocked browsers. Try using a relatives iPhone or something its mad.
Sam Altman worked at the same incubator that runs this website.
Founding a start-up with VC money, dumping the bag into someone else's lap, and then riding off into the sunset is a very different skill set from actually growing and running a company that is no longer early stage.
Look at Zuckerberg. He may have been good as a founder, but if he didn't have super voting shares, and if Meta's cash flow from their ad business wouldn't mask how poor his strategic decision making has been, he would have been pushed out as CEO years ago.
Emarketer’s data finds that standalone chatbots like ChatGPT, Microsoft Copilot app, Google AI Mode, and Amazon Alexa for Shopping (formerly Rufus) in U.S, will generate less than $1 billion in ad revenue this year, and just $5.41 billion by 2030. How would that be possible? In the past I used Google maybe 10 times a day with a short query. From which Google had to guess my intent. Now I babble with Gemini all day ab…
> And Google's ad revenue from search is over $100B per year.
From search or from adsense? That's very different. People place adsense banners on their websites which has nothing to do with search.
So, how do their overall financials look these days?
Will Locket wrote about it last month: https://www.planetearthandbeyond.co/p/openai-is-in-a-far-wor... tldr is: They either get a successful IPO to stave off bankruptcy for a couple more months, or they're going to be bankrupt by the beginning of next year.
There's a very low chance of OpenAI doing an IPO this year: https://polymarket.com/event/openai-ipo-by. So the assumption that they "have to do an IPO" already seems questionable. The rest of the analysis also feels pretty hand-wavy. I'm not saying OpenAI is in a strong financial position, but this article doesn't make a solid enough case for why it's supposedly in such dire straits.