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Leak confirms OpenAI is preparing ads on ChatGPT for public roll out

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Re: Leak confirms OpenAI is preparing ads on ChatGPT for public roll out

#631

Post by tim333 »

btheunissen wrote: post #516
jdoliner wrote: post #491

It's not totally obvious to me that you can get the economics of this to work. A Google search costs ~.04 cents to serve, whereas a frontier reasoning LLM request costs about 2 cents. The revenue from a Google search is also around 2 cents. So the margins are dangerously thin on an LLM. Now there's lots of variables that can be tweaked on this. So it's possible to get it to work. But there's a lot less room for error…

The obvious knob to turn here is that the floor price of ad auctions will be incredibly high, with the justification that AI is expensive. As someone outside of the ad-tech space it blows my mind how much Instagram and Google ads cost these days, and OpenAI would certainly want to price their ad offering as more “premium” (see: $$$).

The pricing doesn't really work like that - it's more an auction amongst different companies wanting to sell their services so the price comes down to how much the companies make from customers acting on the ads. Which is why you have to pay crazy money to advertise a mortgage for example - the mortgage companies make a lot if they sell one. I think OpenAI could do well at it.

Re: Leak confirms OpenAI is preparing ads on ChatGPT for public roll out

#632

Post by xzjis »

the_other wrote: post #624

This seems like an admission that LLMs don’t bring the productivity gains claimed/projected. Advertising works entirely counter to (individual) productivity. Adertising requires attention, and attention distracts from productivity. So oAI’s new route to profitability cannibalises their earlier route.

If I play devil's advocate, I'd say the productivity gain is so significant that even with the distraction of ads, you still save time by using LLMs :)

Re: Leak confirms OpenAI is preparing ads on ChatGPT for public roll out

#633

Post by hexbin010 »

Everyone is being played by some very shrewd businessmen. They had the long-term play thought-out.

The play to me it seems was to to make it appeal to as many people as possible, sell it as an oracle. Get companies to sign up, who are desparately trying to use it to reduce costs and reduce headcount. Then pivot before the old customers get angry that they've been duped (thanks suckers for all the investment !).

The timing was perfect with (post-)COVID and post-ZIRP economic struggles

Re: Leak confirms OpenAI is preparing ads on ChatGPT for public roll out

#634

Post by nikanj »

jstummbillig wrote: post #590
scuff3d wrote: post #564

Earlier quoted context omitted.

At least those are obvious. Them sneaking ads in that don't look like ads are what I'm more concerned about.

That would be illegal. I understand that there are a lot of strong opinions and open questions about OpenAI behavior – the amount of vigilantism is quite staggering – but if what they do is found to be clearly illegal by courts around the world, they will have to pay very hefty fines. Disguising ads is one such move. That's just not a winning business.

AirBnB and Uber have demonstrated to all companies that legality doesn’t really matter as long as the numbers are good. It takes regulators an ungodly amount of time to act, and any well-written appeal buys you another 5 years for making political contributions

Re: Leak confirms OpenAI is preparing ads on ChatGPT for public roll out

#635

Post by delaminator »

Andrex wrote: post #27
aurareturn wrote: post #14

- ~1 billion users in just 3 years - Extremely personal data on users - Novel way of introducing and learning more about sponsored products - Strong branding for non-techie people (most normal people don't know what Claude or Gemini are) - An app that is getting more and more addictive/indispensable I think OpenAI is going to kill it in ads eventually. This is why Meta and Google went all in on AI. Their lucrative di…

Spinning up an all-new ad network is pretty tough. I would think OpenAI would need to beat Meta/Google on basics like CPM in order for the network effects to make it desirable for ad vendors over Meta/Google. Ad budgets are fixed and zero-sum and vendors (in my head, I don't know) would prefer to spend their money on the best network giving the best results. I don't know if ads in LLM chats can get there.

Is it harder than spinning up a multi billion dollar data centre network with other people’s money?

Partner branding would be a mechanism to get the ball rolling - and some are big names. Oracle, Shutterstock, BuzzFeed, Bain & Company, Salesforce, Atlassian, Neo, Consensus,

Re: Leak confirms OpenAI is preparing ads on ChatGPT for public roll out

#636

Post by nebula8804 »

9dev wrote: post #611
rubidium wrote: post #525

Earlier quoted context omitted.

Amazon prime video showed us that. First no ads. Then ad free if you pay extra. Then “ad free” except half the shows have a “this show requires ads” bs and still have ads. Scummy flea ridden advertisers at their core.

And Netflix follows suit. You think you can escape the ads? Think again.

Yes we can. Pirate the stuff, they try to block it? Use a seedbox.

Same goes for AI. This will accelerate options for private hosted AI. Which I guess will happen eventually anyway once cheap hardware gets to a state where you can run X model size at home for cheap.

As always its the people in the know that have the upper hand. The mass user base does not have this knowledge unfortunately. They might just stop using the service if no competitor steps up. We are seeing it with streaming cancellations.

Re: Leak confirms OpenAI is preparing ads on ChatGPT for public roll out

#637

Post by delaminator »

ViewTrick1002 wrote: post #382
marcosdumay wrote: post #351

Earlier quoted context omitted.

> Also 20 billions of revenues, not profits, is orders of magnitude too low compared to their expenses. Nah, it's just one order of magnitude... Also, they expect revenue to grow exponentially so it's 20 billions annualized by the end of the year. Last time I saw somebody talk about it, it was about half of it, and trending down. Anyway, if they manage to take ~20% of the ads revenue from Google, they will be able to…

The problem is that inference is a whole different ballgame in terms of costs compared to a traditional SaaS model where each extra customer adds near zero in cost. They may make it work but OpenAI is more akin to a traditional high revenue low profit business like for example a grocery store. Thats why we are seeing the explosion of extra tools to try lock in business for higher value use cases and not fight on the…

In the UK, £1 of every £3 spent on groceries is in Tesco supermarket.

They have just under 7% gross margin on £70bn of revenue.

OpenAI are going to need to sell a lot of ads to pay that $300bn bill they have coming.

Re: Leak confirms OpenAI is preparing ads on ChatGPT for public roll out

#638

Post by nebula8804 »

kevinsync wrote: post #293
neximo64 wrote: post #162

Earlier quoted context omitted.

> most normal people don't know what Claude or Gemini are That's actually changed a while ago.

Weirdly, I think Perplexity is getting a lot of mainstream name recognition because of podcasts. All the big slop pods like Rogan, Theo Von, etc are sponsored by Perplexity and the hosts constantly name check it by asking to “look stuff up on Perplexity”. Honestly pretty smart marketing all things considered.

Does Rogan even know what Perplexity is or is he just reading ad copy? Has it come up in a podcast? I think he only has ever mentioned Grok and ChatGPT. Dont even think Claude has ever come up. He has done that crap before, just reading an ad without any usage of the product. They all do it.

Re: Leak confirms OpenAI is preparing ads on ChatGPT for public roll out

#639

Post by nebula8804 »

delaminator wrote: post #612
kevinsync wrote: post #293

Earlier quoted context omitted.

Weirdly, I think Perplexity is getting a lot of mainstream name recognition because of podcasts. All the big slop pods like Rogan, Theo Von, etc are sponsored by Perplexity and the hosts constantly name check it by asking to “look stuff up on Perplexity”. Honestly pretty smart marketing all things considered.

Perplexity sponsors Lewis Hamilton, with a prime spot on his helmet so every on board shot has their logo. https://www.perplexity.ai/hub/blog/perplexity-x-lewis-hamilt... Here it is in action https://youtube.com/shorts/1SqQV5iD__s

How can we even measure whether this has any effect on people? This seems like a lousy way to get the word out.

Re: Leak confirms OpenAI is preparing ads on ChatGPT for public roll out

#640

Post by mattlondon »

mattlondon wrote: post #599
Invictus0 wrote: post #421

Earlier quoted context omitted.

what's with all the naysaying? It's HN in 2025 and you think a company the size of OpenAI can't afford to build ads?

I don't think it is impossible, but suggesting you can go from zero to competing with Google and Facebook with a few dozen people is wildly underestimating the requirements. Yes a few dozen engineers could probably build and support the infrastructure to run it, but that is not the hard part. The hard part is the sales, is the compliance, the account management, is the billing system and inevitable snafus, is the fir…

I also forgot to point out that Open ai is not "disrupting" some stuffy old ad company by bringing AI to the ads business to revolutionise and automate it. They're not going to get AI to do all the hard work and put everyone else out of business because they're the only ones using AI.

They are competing directly against their biggest AI competitor who has better AI models than them (at the moment at least) which are SOTA, AND also has an existing huge ad business and sales force. Not to mention Google is currently cramming AI into every single one of their products and serving to billions of people already, and own their entire business from silicon up through to the properties people are advertising on.

OpenAI are coming from behind both in their AI tech, their DAU count, and in their advertising business (or rather lack of it). And they're doing this while actually renting hardware from Google Cloud to do it too!

Not impossible for them to do this of course, but it is a big lift and will take years. They might do it though, but I think odds are they'll fizzle out before then (either run out of money, enshitification, or simply fall to the back of the pack)

People who say "Google are toast" just don't understand the scale of the ads business (and the markets seem to agree that goog is insurmountable, at least for now)

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