Technology is not neutral.
The way a piece of technology is built and and how it works is always downstream of the incentives, opinions and choices of its builders and the context they are operating in. This is an obvious point that is often forgotten.
That technology is not neutral sometimes allows us to trace the impacts of technology back to the actions and thinking of its builders. Understanding the incentives, opinions and choices of these people is key for understanding why technology develops in a certain way or why it has certain impacts.
This backdrop is important when thinking about how the internet and digital products and services look today. Many of the products and services we have become accustomed to over the years are available for no upfront monetary cost for users. Search engines, social media platforms, and now AI chatbots all have free versions that essentially anyone with an internet connection can use.
But much of this free internet as we know it has been powered by ads. Google was one of the first companies to really work out how to build a business model that enabled its product to be free to use whilst still generating revenue. It figured out how to make revenue-generation essentially invisible to users yet still providing and updating a useful product.
And now OpenAI is doing the same by introducing ads to ChatGPT. The AI provider is currently rolling this out to ChatGPT free and Go users, with advertisers reportedly committing between $50,000 to $100,000 in ad spend.
The reasoning for implementing ads is similar to the constraints that Google and others had to face in the journey to profitability. However, I think the nature of its implementation for AI systems like ChatGPT will be different.
OpenAI’s pivot to ads is a sign of the reality they face - they need a reliable way to generate revenue. The company needs a way to cope with the immense increases in infrastructure spend on top of the high level of investments it has secured over the years. It would seem that subscriptions and enterprise deals are not sufficient.
Maybe OpenAI’s mission is still to build AGI eventually. But it may not survive to achieve this feat unless it develops a workable business model in the meantime to fund and power its efforts toward this grand milestone.
Google faced a similar problem in its early days. It bulked up its ad businesses due to pressure from investors and the need to somehow make money from its product.
When it comes to ads on Google, these are aligned to inferences made about users based on what the queries they enter into the search engine. On social media platforms, these inferences are derived from a wider range of user activity, including the people they follow and the content they engage with.
Ads in AI chatbots will be aligned to something different, something much deeper and higher-resolution than the data points that search engines or social media platforms can utilise.
AI ads will be aligned to a user’s actual thoughts, something very distinct from the search queries, social graphs and engagement metrics of yesteryears.
In this newsletter I go through this argument and explore:
How AI systems sit closer to user intentions than any other system
Why AI ads are inevitable
What happens to data rights