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OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

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Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#31

Post by IsTom »

ralph84 wrote: post #21
thg wrote: post #12

Earlier quoted context omitted.

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.

The scale current of money-burning is just wild. I'm not sure you can compare it to anything else this century.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#32

Post by esseph »

Havoc wrote: post #20

Wouldn't be surprised if there is utter panic behind the scenes. They somehow need to corner many billions of business meanwhile chinese labs reckon they'll have fable class models by end of the year. [0] That does not leave a lot of room for mistakes. I reckon they'll get government to block chinese models just like the US car industry did with EVs. https://www.tomshardware.com/tech-industry/artificial-intell...

> I reckon they'll get government to block chinese models just like the US car industry did with EVs.

This is more or less already the case. Not that they're blocked, but... it may limit who you can work with and what insurance companies will cover you.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#34

Post by rf15 »

xattt wrote: post #14
thg wrote: post #12

Earlier quoted context omitted.

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.

Any particular preparations to do before this ship hits the sand?

Extract as much liquidity as you can and don't have any commitments to them.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#35

Post by lelanthran »

ArtTimeInvestor wrote: post #9

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…

> 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 about everything. And Gemini can ask questions what exactly I mean. Why wouldn't Alphabet be able to generate more revenue from this than from search?

When you used google 10x a day, you saw, at a minimum, 20 ads/day. How many ads are you seeing when you babble all day long with a chatbot?

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#36

Post by RugnirViking »

ArtTimeInvestor wrote: post #9

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…

why would they be able to generate more revenue? it isn't clear to me. Maybe ads will be targeted better, maybe they wont. Either way, major companies marketing budgets won't be going up, only shuffling around?

So its not really much to do with the technology or how good it is, but the stories their salespeople can tell. And I guess the story isnt good/convincing enough

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#37

Post by esseph »

IsTom wrote: post #31
ralph84 wrote: post #21

Earlier quoted context omitted.

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.

The scale current of money-burning is just wild. I'm not sure you can compare it to anything else this century.

The tech industry is currently spending more on AI infrastructure every single year than the United States spent during the absolute peak annual years of the post-9/11 wars.

That said, $2T was spent during GWOT with another $8T in veteran care, DHS, interest in debt.

Current AI spend this year is expected to be $2.59T (chips, infra, etc)

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#38

Post by JumpCrisscross »

lelanthran wrote: post #35
ArtTimeInvestor wrote: post #9

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…

> 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 about everything. And Gemini can ask questions what exactly I mean. Why wouldn't Alphabet be able to generate more revenue from this than from search? When you used google 10x a day, you saw, at a minimum, 20 ads/day. How many ads are you seeing wh…

> When you used google 10x a day, you saw, at a minimum, 20 ads/day. How many ads are you seeing when you babble all day long with a chatbot?

There is also way more competition between chatbots than there was between search engines after Google started leaning into ads. Which strengthens the Khan-Esayas hypothesisis "that data privacy constitutes a key parameter of non-price competition in the market for" consumer tech [1][2].

[1] https://yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.pdf

[2] https://www.researchgate.net/publication/327111419_Privacy_a...

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#39

Post by JumpCrisscross »

dependsontheq wrote: post #17

There are only two successful ad business forms in the digital world, attention or intent. Meta is built on attention and Google and others like amazon are built on intent. Everything else is optimizing the targetting data in some kind of behavioral way to get better intent data or to reach the right users. I have no idea where something like Chatgpt stands on that axis, it has actually very little attention (in hour…

> Meta is built on attention and Google and others like amazon are built on intent

I'm having trouble seeing the difference. They both capitalise on attention, i.e. eyeballs. And they both try to predict what you're likely to click on so they can show you the most-relevant ads.

Re: OpenAI's Ad Business Is on Pace to Miss Its Own Forecast by 90%, Analyst Says

#40

Post by grebc »

khoury wrote: post #16
ChicagoDave wrote: post #13

Does anyone at OpenAI know how to run a business?

Sam Altman worked at the same incubator that runs this website.

What’s the business? If it’s anything other than raising equity then you didn’t answer the question.
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