This outcome was obvious. If you really let yourself rely on an LLM, it will steer you towards what its owners want; products and services provided by advertisers, the "right" social and moral values, etc. It will even "accidentally" steer you towards its own inflections and ways of thinking. This is one isn't overtly malicious, but is still insidious. Do these companies get to standardize thinking and speaking just so they can get ahead of a technology race?
It is no surprise, somehow they need to earn money. It will be interesting though how much the response of the LLM will be adapted. At least legally advertisement need to be marked for users. So either the response of an LLM will be extended with ad content or replaced by ad content.
- 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 digital ad business is in an existential threat.
I think people who kept saying there is no moat in AI is about to be shocked at how strong of a moat there actually is for ChatGPT.
All free LLM chat apps will need to support ads or they will eventually die due to worse unit economics or run out of funding.
PS. Sam just said OpenAI's revenue will finish at $20b this year. 6x growth from 2024. Zero revenue from non-sub users. What do you guys think their revenue will end up in 2026?
Yeah I think all of the concerns about ARPU and what the ROI from AI will be are not justified given the opportunity if executed well. LLMs contain high intent significant memory. Their usage is exploding.
Getting $200 subscriptions from a small number of whales, $20 subscriptions from the average white-collar worker, and then supporting everything us through advertising seems like a solid revenue strategy
My wife and I have android phones. Google pretty much shoves AI down our throats. She probably doesn't know what gemini is but I know she's been using it probably without realizing she's using AI. And she never uses ChatGPT.
Not saying that that makes Gemini better or more popular than Open AI in any way. But it just goes to show that more tech-normies use Gemini than you think.
If there's one thing the history of mass internet servuces teaches us, it is that people switch to platforms with superior product/experience in an instant.
Remember Lycos, Yahoo, & Hotmail? They all had strong userbases for their time who switched in an instant to Google Search & Gmail.
Even with network effects, it is very difficult to compete without outright superiority - remember Orkut, MySpace, Google Plus or even Facebook? Meta made the right decision buying Instagram and WhatsApp instead of trying to sustain Facebook.
There are no lock-ins in Chat assistants at all and no network effects. All evidence suggests now cutting edge high performance models are mostly coming out of Google, Anthropic etc and high efficiency models are coming out of China. ChatGPT also appears to have a disadvantage in the talent war - mostly because talent seems to not like to work with the management.
Also almost no one I know uses ChatGPT now as their primary AI assistant now because they feel the quality of answers from others are simply superior (I check case by case) and the same seems to hold in more formal tests in AI enabled product development. Even Microsoft has started hedging bets with Anthropic.
OpenAI really really needs to focus on outright superiority or it's going to be interesting to see how the financial shakeout is going to play.
The memories are the moat. Regardless of the current or future capability, most users already view chatgpt as a personal confidant that they are investing energy into building a relationship with. That will be a far stronger moat than anything else
I'm ok with having ads for free users, many of us saw this coming. What I'm really afraid of and knowing how this industry works, AI advising/gaslighting users into buying useless stuff in the guise of advice is NOT ok.
Imagine you ask ChatGPT about coffee beans and it goes into insane detail about finding the right coffee bean and then it slips in a "btw, here's a couple of good coffee bean brands: A, B, C..."
That's super scary since your trust factor with the AI is really high and it already knows it and is actively exploiting it. I would imagine even paid users might be subject to this without them ever knowing/finding out.
This is why open-weight open-source models are extremely important.
they're going to compete on ad unit economics against a company whose entire bread and butter has been selling ads. All while increasing unit costs to provide their service (like all the AI companies seem to be doing by just having more and more planning layers)
If ChatGPT went away tomorrow everyone who wanted to would be fine just moving to one of the other random chatbots from one of the other providers. ChatGPT is the default name that people know, but I don't think that's the same as a moat. A moat would allow OpenAI to go really hard on pricing and ads, and I don't think they have that margin!
Would be quite hilarious if the first two companies to buy As space on ChatGPT is Anthropic and Google.
Specially hilarious, since that's exactly how TikTok got all their initial traction from Meta Ads.
> All free LLM chat apps will need to support ads or they will eventually die due
That’s the issue OpenAI has: Gemini is “free” with google search and other google services. If Apple get their act together they can provide a “privacy respecting” AI free with every iPhone.
I’ve recently switched from OpenAI as my daily ‘helper’ chatbot to Gemini (I’ve done it with Claude in the past and still use that for coding) and don’t miss ChatGPT. Sure each has quirks and one will release a new version and it becomes the best LLM briefly but to the majority of public and businesses they are interchangeable and the winner is the one that can deliver the functionality for free (because it’s paid for by another service) or into an existing product.
Matt Levine once wrote about OpenAI's business model:
------------------------------------
There’s a famous Sam Altman interview from 2019 in which he explained OpenAI’s revenue model [1] :
> The honest answer is we have no idea. We have never made any revenue. We have no current plans to make revenue. We have no idea how we may one day generate revenue. We have made a soft promise to investors that once we’ve built this sort of generally intelligent system, basically, we will ask it to figure out a way to generate an investment return for you. [audience laughter] It sounds like an episode of Silicon Valley, it really does, I get it. You can laugh, it’s all right. But it is what I actually believe is going to happen.
It really is the greatest business plan in the history of capitalism: “We will create God and then ask it for money.” Perfect in its simplicity. As a connoisseur of financial shenanigans, I of course have my own hopes for what the artificial superintelligence will come up with. “I know what every stock price will be tomorrow, so let’s get to day-trading,” would be a good one. “I can tell people what stocks to buy, so let’s get to pump-and-dumping.” “I can destroy any company, so let’s get to short selling.” “I know what every corporate executive is thinking about, so let’s get to insider trading.” That sort of thing. As a matter of science fiction it seems pretty trivial for an omniscient superintelligence to find cool ways make money. “Charge retail customers $20 per month to access the superintelligence,” what, no, obviously that’s not the answer.
------------------------------------
I agree with the sibling commenter that this move is a sign of OpenAI's weakness. If you really believe you have a superintelligent machine-god (or will have one soon) then "run ads when people talk to it" is not the business model you pick.
They own zero hardware or software stacks. Their AI just got wiped by Google. Unknown Chinese companies release free models that are mere weeks behind them.
Apple can restrict the ChatGPT app on iOS to not sext with users. What's Altman going to do? Cry in a corner?
Is this data actionable though? Google has way more marketable data on me as I search YouTube for my hobbies and other interests. My LLM could probably sell me philosophy books? The amount of marketable stuff I provide it is minimal, and even the things that are marketable I’m unlikely to click on.
Everything in tech becomes ad-supported bullshit even if you pay for it. Tech knows no other business model with consumers besides devaluing the product to grow large enough to be another shitty ad platform.
They spend $3 for every $1 they make, so they're just living off of investors and government contracts at this point. Their revenue is basically a moot point.
"that could redefine the web economy" I don't think that ads in ChatGPT are that disruptive, it's just another channel. I think ChatGPT apps are an order magnitude more game changing, as they are not a new markting channel but a new distribution channel for software. Your next ad will still be an ad, but your next SaaS might be a ChatGPT App.
If you're not paying for a product (the full price), then you are the product.
If you're not paying for the product, and you aren't the product, you're in the start-up phase and just eating the bait. And man, people have been eating a lot of bait.
“I’d be happy to answer your question… right after a word from our sponsor: Xyeniceli. Side effects may include ...”
OR
ChatGPT: “Why don't you let me fix you some of this Mococoa drink? All natural cocoa beans from the upper slopes of Mount Nicaragua. No artificial sweeteners.”
User: “What the hell are you talking about? Who are you talking to?”
ChatGPT: “I've tasted other cocoas. This is the best.”
Still it saddens me that we will be sitting here in a years time and discuss our experiences of being fed ads served as "objective information".
Today if I ask: "should I buy a store product or just use raw material X?" , gpt and others will gladly say you might as well just use the raw product.
So we had this short period of ad-free time on ChatGPT. A tiny bubble where things were not polluted yet. And of course, now they are going down the exact same path as everyone else.
Same story with Amazon Prime Video. We had a few wonderful years without ads. Now I pay them 2.99 a month just to not see ads, and even then some shows are marked as “only with ads.” It is absurd.
And honestly, I am just tired of this pattern. Every service launches clean. They talk about user experience. They talk about trust. They talk about building something new. Then, the moment they have enough users locked in, the ad creep begins. First a little banner, then a “sponsored” thing, then pre-rolls, then mid-rolls, then “pay extra to remove the ads we just added.”
It feels like everything on the internet eventually devolves into the same dark pattern: take a good service, inject ads, charge to remove the ads, slowly add more ads anyway, and hope nobody leaves because the alternatives are just as bad.
The internet used to feel like innovation. Now half of it feels like airport TV: loud, annoying, and impossible to escape unless you pay for yet another upgrade.
Hoping this pushes a new generation of adblockers, but I'm skeptical it'll stay a fair fight. The next wave of ads will likely be far subtler than today's web ads - more integrated into content, harder to detect, and easier to normalize.
This next wave is already here and has been for years / decades. It's social media, where people post their experiences, products, things they watch, things they play all the time. And some of these people will get paid for posting things. Some of these people aren't real people. Some of these posts will get promoted, either with direct money or through bought upvotes.
See also the "fake news" pandemic now almost 10 years ago, where they weaponised these techniques towards steering voting behaviour in favor of right-wing politicians.
But browse Facebook (or remember when you did); at least on my side, pretty much all posts from humans (in between the ads) was them sharing what / where they were eating, where they were going on vacation, what they were watching / playing, etc. It's word-of-mouth advertising disguised as possibly shared interests.
This actually made me smile. The reason should be explained.
I hate ads, so I was sold on e. g. ublock origin from the get go - it is a general content blocker, before Google declared total war against and disabled the extension (karma will come back to Google eventually, but that is a separate story). I decide to want to live an ad-free life, naturally including on the world wide web. All ads must go. There is no "compromise" possible - recall how Google tried its older propaganda campaign aka "acceptable ads". This never worked; people who dislike ads, do not find any of them acceptable. Ever.
So greed is the motivation for ads.
Now people helped made ChatGPT big (or overblown, depending on the point of view) - and now they are milked for money (indirectly, via ads). So their time is now wasted with this. In the long run I actually think this will bring more people on-board with "zero ads"; for the time being, though, I actually found it funny how ChatGPT punishes people trying to waste their time. Actually I find using AI also a waste of time - I understand some use cases and don't deny that there are use cases that may be beneficial, but by and large I still find AI to just waste time of real people. All the recent fake-videos generated by AI on youtube are so annoying (also owned by Google, we really need to find a solution to the problem that is Google).
At one point there was probably a notion that upselling better models would work, and I’m sure to some small extent it has. But to the general public the goodness of the model is too nuanced I’m guessing. And it’s not like OpenAI can offer a “bad” base model or it would be a reputation hit
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[ 1.8 ms ] story [ 92.7 ms ] threadProbably can make a ton of money shorting that
This already happened a while ago with specific shopping queries.
Like it might not want to tell you about negative health effects from McDonalds, if McDonalds becomes a major source of ad revenue
- 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 digital ad business is in an existential threat.
I think people who kept saying there is no moat in AI is about to be shocked at how strong of a moat there actually is for ChatGPT.
All free LLM chat apps will need to support ads or they will eventually die due to worse unit economics or run out of funding.
PS. Sam just said OpenAI's revenue will finish at $20b this year. 6x growth from 2024. Zero revenue from non-sub users. What do you guys think their revenue will end up in 2026?
Getting $200 subscriptions from a small number of whales, $20 subscriptions from the average white-collar worker, and then supporting everything us through advertising seems like a solid revenue strategy
Not saying that that makes Gemini better or more popular than Open AI in any way. But it just goes to show that more tech-normies use Gemini than you think.
“Google Gemini” is the No 2 ranked app in the Apple App Store (behind ChatGTP) and has been for some time
Remember Lycos, Yahoo, & Hotmail? They all had strong userbases for their time who switched in an instant to Google Search & Gmail.
Even with network effects, it is very difficult to compete without outright superiority - remember Orkut, MySpace, Google Plus or even Facebook? Meta made the right decision buying Instagram and WhatsApp instead of trying to sustain Facebook.
There are no lock-ins in Chat assistants at all and no network effects. All evidence suggests now cutting edge high performance models are mostly coming out of Google, Anthropic etc and high efficiency models are coming out of China. ChatGPT also appears to have a disadvantage in the talent war - mostly because talent seems to not like to work with the management.
Also almost no one I know uses ChatGPT now as their primary AI assistant now because they feel the quality of answers from others are simply superior (I check case by case) and the same seems to hold in more formal tests in AI enabled product development. Even Microsoft has started hedging bets with Anthropic.
OpenAI really really needs to focus on outright superiority or it's going to be interesting to see how the financial shakeout is going to play.
And this is a good progression. Google search results were just turning to garbage. Facebook was just a slurry of noise.
ChatGPT is actually helpful and useful.
Imagine you ask ChatGPT about coffee beans and it goes into insane detail about finding the right coffee bean and then it slips in a "btw, here's a couple of good coffee bean brands: A, B, C..."
That's super scary since your trust factor with the AI is really high and it already knows it and is actively exploiting it. I would imagine even paid users might be subject to this without them ever knowing/finding out.
This is why open-weight open-source models are extremely important.
If ChatGPT went away tomorrow everyone who wanted to would be fine just moving to one of the other random chatbots from one of the other providers. ChatGPT is the default name that people know, but I don't think that's the same as a moat. A moat would allow OpenAI to go really hard on pricing and ads, and I don't think they have that margin!
https://www.latimes.com/business/story/2025-11-26/snapchat-s...
That’s the issue OpenAI has: Gemini is “free” with google search and other google services. If Apple get their act together they can provide a “privacy respecting” AI free with every iPhone.
I’ve recently switched from OpenAI as my daily ‘helper’ chatbot to Gemini (I’ve done it with Claude in the past and still use that for coding) and don’t miss ChatGPT. Sure each has quirks and one will release a new version and it becomes the best LLM briefly but to the majority of public and businesses they are interchangeable and the winner is the one that can deliver the functionality for free (because it’s paid for by another service) or into an existing product.
------------------------------------
There’s a famous Sam Altman interview from 2019 in which he explained OpenAI’s revenue model [1] :
> The honest answer is we have no idea. We have never made any revenue. We have no current plans to make revenue. We have no idea how we may one day generate revenue. We have made a soft promise to investors that once we’ve built this sort of generally intelligent system, basically, we will ask it to figure out a way to generate an investment return for you. [audience laughter] It sounds like an episode of Silicon Valley, it really does, I get it. You can laugh, it’s all right. But it is what I actually believe is going to happen.
It really is the greatest business plan in the history of capitalism: “We will create God and then ask it for money.” Perfect in its simplicity. As a connoisseur of financial shenanigans, I of course have my own hopes for what the artificial superintelligence will come up with. “I know what every stock price will be tomorrow, so let’s get to day-trading,” would be a good one. “I can tell people what stocks to buy, so let’s get to pump-and-dumping.” “I can destroy any company, so let’s get to short selling.” “I know what every corporate executive is thinking about, so let’s get to insider trading.” That sort of thing. As a matter of science fiction it seems pretty trivial for an omniscient superintelligence to find cool ways make money. “Charge retail customers $20 per month to access the superintelligence,” what, no, obviously that’s not the answer.
------------------------------------
I agree with the sibling commenter that this move is a sign of OpenAI's weakness. If you really believe you have a superintelligent machine-god (or will have one soon) then "run ads when people talk to it" is not the business model you pick.
They own zero hardware or software stacks. Their AI just got wiped by Google. Unknown Chinese companies release free models that are mere weeks behind them.
Apple can restrict the ChatGPT app on iOS to not sext with users. What's Altman going to do? Cry in a corner?
Is this data actionable though? Google has way more marketable data on me as I search YouTube for my hobbies and other interests. My LLM could probably sell me philosophy books? The amount of marketable stuff I provide it is minimal, and even the things that are marketable I’m unlikely to click on.
People hate ads. I have changed from ChatGPT to Grok and have felt absolutely no difference in my usage patterns, just getting better answers.
Every competitor has cloned ChatGPTs UI/UX and API, so hopping between competitors is a no-brainer. There is no moat.
If you're not paying for the product, and you aren't the product, you're in the start-up phase and just eating the bait. And man, people have been eating a lot of bait.
I'm not sure how it'll work out when your computing expenses are much higher. It certainly won't make them profitable using traditional models.
“I’d be happy to answer your question… right after a word from our sponsor: Xyeniceli. Side effects may include ...”
OR
ChatGPT: “Why don't you let me fix you some of this Mococoa drink? All natural cocoa beans from the upper slopes of Mount Nicaragua. No artificial sweeteners.”
User: “What the hell are you talking about? Who are you talking to?”
ChatGPT: “I've tasted other cocoas. This is the best.”
However, if you find yourself encountering these types of situations often, you may wish to protect yourself with software like NordVPN.
NordVPN is...
Still it saddens me that we will be sitting here in a years time and discuss our experiences of being fed ads served as "objective information".
Today if I ask: "should I buy a store product or just use raw material X?" , gpt and others will gladly say you might as well just use the raw product.
Pretty sure that will change very quickly.
So are all the comments addressing those? Nah it's all just people bitching about AI.
Same story with Amazon Prime Video. We had a few wonderful years without ads. Now I pay them 2.99 a month just to not see ads, and even then some shows are marked as “only with ads.” It is absurd.
And honestly, I am just tired of this pattern. Every service launches clean. They talk about user experience. They talk about trust. They talk about building something new. Then, the moment they have enough users locked in, the ad creep begins. First a little banner, then a “sponsored” thing, then pre-rolls, then mid-rolls, then “pay extra to remove the ads we just added.”
It feels like everything on the internet eventually devolves into the same dark pattern: take a good service, inject ads, charge to remove the ads, slowly add more ads anyway, and hope nobody leaves because the alternatives are just as bad.
The internet used to feel like innovation. Now half of it feels like airport TV: loud, annoying, and impossible to escape unless you pay for yet another upgrade.
Edit: Need to setup a raspberry pi.
See also the "fake news" pandemic now almost 10 years ago, where they weaponised these techniques towards steering voting behaviour in favor of right-wing politicians.
But browse Facebook (or remember when you did); at least on my side, pretty much all posts from humans (in between the ads) was them sharing what / where they were eating, where they were going on vacation, what they were watching / playing, etc. It's word-of-mouth advertising disguised as possibly shared interests.
I hate ads, so I was sold on e. g. ublock origin from the get go - it is a general content blocker, before Google declared total war against and disabled the extension (karma will come back to Google eventually, but that is a separate story). I decide to want to live an ad-free life, naturally including on the world wide web. All ads must go. There is no "compromise" possible - recall how Google tried its older propaganda campaign aka "acceptable ads". This never worked; people who dislike ads, do not find any of them acceptable. Ever.
So greed is the motivation for ads.
Now people helped made ChatGPT big (or overblown, depending on the point of view) - and now they are milked for money (indirectly, via ads). So their time is now wasted with this. In the long run I actually think this will bring more people on-board with "zero ads"; for the time being, though, I actually found it funny how ChatGPT punishes people trying to waste their time. Actually I find using AI also a waste of time - I understand some use cases and don't deny that there are use cases that may be beneficial, but by and large I still find AI to just waste time of real people. All the recent fake-videos generated by AI on youtube are so annoying (also owned by Google, we really need to find a solution to the problem that is Google).
The former is what worries me.