The team also assumes LLM companies will capture 2 per cent of the digital advertising market in revenue, from slightly more than zero currently.
This seems quite low. Meta has 3.5 billion users and projected ~$200b revenue in 2025. ChatGPT is at ~1 billion so far. By 2030, let's just stay ChatGPT reaches 2 billion years or 57% of Meta's current users.
I'd like to think that OpenAI's digital ad revenue should reach 10% by 2030 an then accelerate from there. In my opinion, the data that ChatGPT has on a user is better than the inferred user data from Instagram/FB usage. I think ChatGPT can build a better advertisement profile of each user than Meta can which can lead to better ad targeting. Further more, I think ChatGPT can really create a novel advertisement platform such as learning about sponsored products directly via chat. I'm already asking ChatGPT about potential products and services everyday like medicine, travel, gadgets, etc.
I think people are severely underestimating ChatGPT as a way to make money other than subscriptions. I also think people are underestimating the branding power ChatGPT has already. All my friends have ChatGPT on their phone. None of them except me has Gemini or Claude app.
This doesn't account for OpenAI's other ambitions such as Sora app.
Hey Sam Altman or OpenAI employee, if you are reading this, I think you should buy the North American version of TikTok if the opportunity presents itself. The future of short videos will be heavily AI generated/assisted. Combine Tiktok's audience with your Sora tools and ChatGPT data and you got yourself a true Instagram competitor immediately. If the $14b sales price of US Tiktok is real, that's an absolute bargain in the grand scheme of things.
> Meta has 3.5 billion users and projected ~$200b revenue in 2025
Meta makes about $200B on ads, Google makes about $235B on ads. Advertising is roughly 1.5% of the total GDP of the US and hasn't changed in 20+ years. So what you have is a big ass pie with a few players fighting for it that barely grows every year.
OpenAI has to somehow:
1. Compete directly with Google Gemini and Meta's Llama for a piece of users pie with a product that has very little differentiator (functionality and technically speaking).
2. Have to prove to advertisers that their single dollar ad purchase on OpenAI is categorically worth more than any other channel.
3. Have enough forward capital to continue purchasing capital-intense hardware purchases.
4. Having enough capital to weather any potential economic headwinds.
OpenAI has branding power, a clear product focused mindset, focused attention, and moves faster than Google and Meta. Nearly 1 billion users in 3 years is no joke.
We're on Hacker News. Y Combinator literally teaches their companies that they can beat incumbents using focus and speed.
My bet is on OpenAI. When they IPO, I can easily see them with $1 trillion in valuation and raise the a record amount of money in an IPO.
If Meta and Google don't see OpenAI and LLMs as an existential threat, they wouldn't invest so much. I think AI has that potential to completely disrupt Google and Meta because it fundamentally changes the way people behave. It's a paradigm shift. It isn't just playing the same game.
With consumers right now? Sure, but so does WhatsApp and IG, both Meta properties. Meta and Google also WAY better brand power with advertisers. So there's that.
> I can easily see them with $1 trillion in valuation and raise the a record amount of money in an IPO.
They have agreements of roughly in $1.5T infra spend (and that doesn't include their own S&M and R&D spend) for the next 5 years. They have to have a combined amount of cashflow to cover that $1.5T (mix of income, debt financing, and stock financing) + all their other spending. The CFO admitted that they may need to bail out data centers to cover this to stay solvent in the long run.
> Y Combinator literally teaches their companies that they can beat incumbents using focus and speed.
YC is literally not God when it comes to advice, so this point is moot. Meta and Google didn't come out of YC and yet still beat incumbents.
With consumers right now? Sure, but so does WhatsApp and IG, both Meta properties. Meta and Google also WAY better brand power with advertisers. So there's that.
With AI. OpenAI/ChatGPT is synonymous with AI. People say "ask ChatGPT" the same way people say "Google it".
They have agreements of roughly in $1.5T infra spend (and that doesn't include their own S&M and R&D spend) for the next 5 years. They have to have a combined amount of cashflow to cover that $1.5T (mix of income, debt financing, and stock financing) + all their other spending. The CFO admitted that they may need to bail out data centers to cover this to stay solvent in the long run.
I'm sure their $1.5t infrastructure commitments are based on hitting certain goals. Their comment about government support for data center is isn't a call for a bailout and taken out of context/exaggerated by mass media.
YC is literally not God when it comes to advice, so this point is moot. Meta and Google didn't come out of YC and yet still beat incumbents.
Yes but Google also beat the incumbents in Yahoo, AOL. People thought no way back in 2000 as well. Heck, Google wanted to sell itself to Yahoo.
> I'm sure their $1.5t infrastructure commitments are based on hitting certain goals.
If you're so sure, can you share your source?
> Their comment about government support for data center is isn't a call for a bailout and taken out of context/exaggerated by mass media.
The context was vague, but the idea that she was conveying is well understood - basically she was saying "we're going to get so big and so important for basic societal needs in the US that if we ever become insolvent the US government can step in and make sure we survive".
> Yes but Google also beat the incumbents in Yahoo, AOL.
Because TikTok is free, had no competitors and network effects given that it is a social media platform. ChatGPT already depends on subscription income, has to compete with companies that can offer the same service for free and has no network effects because you're literally talking to a commodified bot
> TikTok [..] had no competitors and network effects
TikTok, or rather ByteDance, acquired Musical.ly as a competitor to absorb the user base and jump start their network. Their also have been a lot of short-form video platforms before (e. G., Vine) and during TikToks growth (Instagram reels, YT Shorts).
Reuters reported that ByteDance (TikTok parent) in Q1 2025 had $48b in revenue.[0] They should surpass $200b for 2025 which would make them bigger than Meta.
In other words, Tiktok has already caught up with Instagram in terms of revenue.
> most of which is from the Chinese market as it continues to face political pressure to divest its U.S. arm.
We're not comparing apples and oranges here. Google and Meta don't operate in China, so there is no giant online ad spend (especially for social) already allocated like there is in the US.
I agree with the gist of your statement but the same could've been said for a number of new companies against entrenched players. Heck, I'm pretty sure google was that company against the existing search.
You'll probably argue that this time it's different but no one knows what's different until it's already changed.
If OpenAI (or any LLM chat product) starts shoving ads into people's faces, they aren't going to have a billion users anymore.
I already get mad at gemini when it shoves a barely-related youtube link into the chat with someone's huge stupid youtube face on it. Its a major reason why I rarely use it.
As devil's advocate, the innovator's dilemma is said to be the cause of incumbent disruption. But in the case of AI, we're seeing incumbents over-correct into rapid AI adoption. It is a mess, but I wouldn't then use history to predict who the winners will be.
I don't know if they over correct. I think they rightly see the existential impact of AI on their existent business.
I think people who say they're only doing this for investors is wrong. I think management at Google and Meta truly think they're f'ed if they don't get AI right.
What about money spent on software developers, other knowledge work… AI could take 10-20% of spending on humans… that would be a few trillion per year.
It seems to me you're comparing apples and oranges here.
I don't think so. 1 billion users and a clear intention to deliver ads with an immense amount of data on users. That's a clear threat to both Meta and Google.
PS. That's why Meta and Google are all in on AI. OpenAI is an existential threat to both in my humble opinion.
> You didn't state reasons why not being a social platform matters here.
There's nothing to pointlessly waste your time on. You open it to do a thing, you either do the thing or get frustrated or leave. Social networks are designed to waste your time even when they outlive their usefulness, therefore they can serve you more ads.
You could argue Google is the same as ChatGPT in that regard, but that's why Google has Adsense in almost any search result you click on.
As for your group chats feature argument, anyone can make a social network, that's the easy part. Getting friend groups to switch is the more difficult part.
> PS. That's why Meta and Google are all in on AI. OpenAI is an existential threat to both in my humble opinion.
They're all in on AI because that's what their investors want them to do to "not be left behind". Meta was all in Metaverse. And on a cryptocurrency before that (Diem). And on Free Basics before that. The fact that none of those succeeded didn't hurt them at all precisely because they had an infinite money glitch known as ads.
They can afford to waste amounts of money equivalent to a yearly budget of a small country, ChatGPT can't.
>There's nothing to pointlessly waste your time on.
Like Google Search, this does not really matter. Fact is, chatgpt is the 5th most visited site on the planet every month. And it happened in about 3 years. 'Nothing to waste your time on?' Completely irrelevant.
Being the most visited or the most used or the most whatever is absolutely useless information, and you should delete it from your mind.
Any idiot off the street can be the most used website on Earth. Easy - go to my website, and I give you free stuff. So why am I not a billionaire? Because that's a dumbass business model and that won't go anywhere.
The idea that if you just "flood the market" you can be successful is a crock of shit, and I think we're all starting to realize it. It's not difficult, or impressive, or laborious to provide something people want. It's difficult to do it in a way that makes money.
You might say - but what about Spotify? What about Uber? Those companies are not successful. They are just barely profitable, after investment on the order of decades. We don't actually know if a service like Spotify even works long term. It sounds fantastic - pay ten bucks or whatever and get all the music you want.
But has anyone taken a step back and asked - hmm - how do we make money off of this? Because obviously that is not the cost of music, right? And we don't own any of the capital, right? And we don't actually make a product, right, we're just a middle man?
ChatGPT is in a similar predicament. The value of ChatGPT is not the ChatGPT, it's what ChatGPT produces. It's a middle man, operating at massive losses, with absolutely no path towards profitability.
> The value of ChatGPT is not the ChatGPT, it's what ChatGPT produces. It's a middleman...
Spotify and Uber are aggregators with high marginal costs that they do not control. Spotify has to pay labels for every stream; Uber has to pay drivers for every ride. They cannot scale their way out of those costs because they don't own the underlying asset (the music or the labor).
OpenAI is not a middleman; they own the factory. They are "manufacturing" intelligence. Their primary costs are compute and energy. Unlike human labor (Uber) or IP licensing (Spotify), the cost of compute is on a strong deflationary curve. Inference costs have dropped orders of magnitudes in the last couple years while model quality has improved and costs will keep dropping. Gemini's median query costs no more than a google search. LLM inference is already cheap.
> Any idiot off the street can be the most used website on Earth. Easy - go to my website, and I give you free stuff.
If they were only burning cash to give away a free product, you’d be right. But they are reportedly at ~$4B in annualized revenue. That is not "giving away free stuff" to inflate metrics; that is the fastest-growing SaaS product in history.
You are conflating "burning cash to build infrastructure" (classic aggressive scaling, like early Amazon) with "structurally unprofitable unit economics" (MoviePass).
Open AI's unit economics are fine. Inference is cheap enough for ads to be viable enough for profitability as a business today. The costs this article is alluding to ? Open AI don't need to do any of that for tier of models and use-cases they have today. They are trying to build and be able to serve 'AGI', which they project will be orders of magnitudes more costly. If they do manage that, then none of those costs will matter. If they don't, then they can just...not do it. 'AGI' is not necessary for Open AI to be a profitable business.
> But they are reportedly at ~$4B in annualized revenue. That is not "giving away free stuff" to inflate metrics; that is the fastest-growing SaaS product in history.
Right, which is just not very impressive giving how much money they are burning.
> Open AI's unit economics are fine
I disagree, they lose massive amounts of money on every query.
The only way for OpenAI to make money off queries is to make it cost more, but that won't work because they have no moat, and cannot even create a moat because of how LLMs work. Again, the model itself or the interface is worthless, consumers only care about what it produces.
Google, Meta, et al. could trivially overthrow OpenAI in my view. Most users probably wouldn't even notice, because they use other interfaces on top of models.
I also think ads are a dead end. Consumers absolutely will not tolerate advertisements in their LLMs. No student is going to submit an essay which has obvious hints towards Bose making the best speakers. No programmer is going to write code that embeds a Java runtime because Oracle paid for OpenAI ad space. No artist is going to publish art that just so happens to contain lots of references to Coca Cola.
LLM chats are just not like other tools. If Google has ads, they can get in the way, but the core Google thing is not compromised. If an LLM has ads, I can no longer trust ANY of it's output, ever, and it's as good as worthless.
OpenAI might be tempted to do the dark pattern thing and hide their ads as much as possible, but I don't think that will work either. It's just not acceptable for the tool to do that, and I don't think consumers will be stupid enough to fall for it. Already, we are seeing online advertisement rapidly plummet in value due to the sheer volume and amount of scams.
Advertisers don't know that yet, but they will. Google might know it, but they certainly won't say it out loud. I can tell you right now, the average consumer has been so bombarded by shitty ads they've become masterminds. They expertly navigate around them, and elegantly ignore them in their peripheral vision. They know X, Y, Z is a scam. New advertisement mediums shake it up, for a bit, but then those die too. Metrics won't necessarily tell you that, because most users are robots so you wouldn't know.
>Right, which is just not very impressive giving how much money they are burning
They are not burning that much money right now.
>I disagree, they lose massive amounts of money on every query.
Both google and Altman confirm the fact that a median LLM query is no more expensive than a google search. Beyond that, we have multiple third parties with who offer profitable access to open source llms and others. Inference is cheap, there's no doubt about it. They lose money because they have hundreds of millions of weekly active users that are not monetized in any way (no ads, nothing).
>Google, Meta, et al. could trivially overthrow OpenAI in my view.
If they could, it would have happened. Both of these players are stuffing their clones in front of billions of users (android and all of meta's apps), and neither have dented Open AI's growth or relevance. ChatGPT is still the undisputed leader in the consumer llm space. Gemini is a very very distant second, and the rest might as well not even register.
There's a reason edge and bing usage is still minuscule despite microsoft having a chokehold on consumer laptops/computers and setting those as defaults. People need to understand that you don't unseat a leader just by copying them. They wish the could trivially overthrow Open AI, but they actually can't.
>I also think ads are a dead end. Consumers absolutely will not tolerate advertisements in their LLMs.
People have said that about Netflix and countless services that introduced ads. Instead, it quickly became Netflix's most popular tier. The Implentation has to be really obnoxious before people actually care about ads.
>No student is going to submit an essay which has obvious hints towards Bose making the best speakers. No programmer is going to write code that embeds a Java runtime because Oracle paid for OpenAI ad space. No artist is going to publish art that just so happens to contain lots of references to Coca Cola.
I'm sorry but you are making up problems that don't need to exist. You are essentially imagining the llm equivalent of obtrusive pop up ads and I have no idea why. Of course chatgpt won't be doing any of these, that's ridiculous.
Online ads simply do not have anywhere NEAR even value for OpenAi. And with each passing day, they become more and more worthless.
You're missing the forest here. Yes, Netflix has ads, but to do so they had to bring down the value of ALL ADVERTISING. The more ads consumers see, the less valuable each individual ad is. Because consumers are tired, and they only have so much money.
As of currently stands, online ads are very close to worthless. Again - nobody is going to tell you that, because they're trying to sell you ad space! But it's true. Just look at how the people around you behave.
> You didn't state reasons why not being a social platform matters here.
The network effects matter so much more for a social platform than a chat bot. The switching costs for a user are much lower, so users can move to a different one much easier.
How sticky will chat bots prove to be in the long term? Will OpenAI be able to maintain a lead in the space in the long term, the way Google was over Bing? It's possible, but it's also pretty easy to imagine other providers being competitive and a landscape where users move between different LLMs more fluidly
Another reason why social media matters is that people actually spend their free time in all those feeds. On the other hand, using LLMs is much more oriented towards specific utilities. Having 1B users who visit you once a day to ask for an email proofread will not make you profitable.
But, like search, it captures intent to buy much better, while looking at feeds for internatinment does not. Adwords worked because of that, they could capture ad revenue on queries that lead to sales. The amount of extra context in AI chat is even better, as is the ability to steer the conversation to different options.
I think Google is the much bigger threat. I've more or elss stopped using ChatGPT now, it's easier to just type the question directly into Google and get the response from their AI rather than navigating to chatgpt first. Anecdotal but I don't see anything long term keeping people on that site.
Problem is the day Google puts a similarly priced and more powerful chatbot similar to ChatGPT and powered by Gemini most users will switch without a second thought, and Google will get all that data about their personal life too. OpenAI having a free tier with powerful models is unsustainable, brand loyalty is a joke at this stage, people will not bother going to ChatGPT if the search bar in their browser starts a discussion with Google. I’m sure big players like Google know OpenAI is a temporary scheme to get free money, they are surfing along now but they are playing the long game.
There are plenty of things I say to ChatGPT that are not immediate need. ChatGPT can easily build a very accurate profile of me as a person and what my past, present and future needs are.
I wanna push back on this a little, sure, openAI has a certain level of detail in it's dataset because of the fact that you actually have conversations with it in order to use their product, but we're talking about a short window of time since the inception of ChatGPT. Google has all your searches (if you use google.com) and all of your browsing history (if you use a chromium based browser) and all of your emails (if you use gmail.com) and they have been adding to this dataset for a lot longer. Personally I stopped using google.com and I have tried my hardest to avoid Chromium-based web-browsers in the last 5-10 years but they still have a hefty dataset of all of my actions before that or when I'm on a (work) computer that forces me to use their systems. Because of this I'm not entirely sure OpenAI knows my intent better than Google, purely based on amount of data processed.
Maybe, but OpenAI only get the data you decide to type into ChatGPT in a vibe therapy session or whatever, and they have to burn a load of GPU time to keep you feeding it more slop.
Google just passively collects email and browsing history, much better data for targeting ads and way less cost to run.
I wonder if meta is a poor comparison for advertising because they're users tend to spend more time on their products doom scrolling, as opposed to something like google, where you get your answer right away and move on.
ChatGPT is a hybrid between Google and Meta. People use it for product and service search and research. People also use it as a companion - especially young people.
people hate ai content. if you dont believe me go into the comment sections of basically any IG reel these days. Plus, nothing locks these videos/reels into a single platform. I’ve seen so many sora videos on IG and I’ve yet to (and dont want to) use sora.
People hit like and then comment "ai"... I think they love being mad at ai or aren't mad enough to stop hitting like. (Just today I saw a viral video on IG of a monkey on the side of a mountain path jumping onto a man's umbrella and getting taken away by the wind)
>I think you should buy the North American version of TikTok if the opportunity presents itself. The future of short videos will be heavily AI generated/assisted.
I will have whatever you're smoking. If a social media platform literally proves the dead internet theory, it's not making any money.
The main problem, I think, is that if your stuff is by robots, for robots, you have no advertising leverage.
I think advertisers are fairly stupid and maybe don't realize that most eyes on their ads aren't eyes at all, and couldn't buy a hair dryer even if they wanted, because they have no hair. How Facebook is still a desirable advertising platform is beyond me.
I think people are severely underestimating ChatGPT as a way to make money other than subscriptions. I also think people are underestimating the branding power ChatGPT has already. All my friends have ChatGPT on their phone. None of them except me has Gemini or Claude app.
This doesn't account for OpenAI's other ambitions such as Sora app.
Hey Sam Altman or OpenAI employee, if you are reading this, I think you should buy the North American version of TikTok if the opportunity presents itself. The future of short videos will be heavily AI generated/assisted. Combine Tiktok's audience with your Sora tools and ChatGPT data and you got yourself a true Instagram competitor immediately. If the $14b sales price of US Tiktok is real, that's an absolute bargain in the grand scheme of things.