00:00 Speaker A

And a big shift could be coming to the AI business model, and it’s all about ads. A new report from Axio saying OpenAI is projecting as much as $100 billion in advertising revenue by 2030. For more, we’re bringing in Yahoo Finance tech editor Dan Howley.

00:18 Speaker A

Dan, I’m reading these numbers and the the first thing I’m thinking is, well, that assumes OpenAI can keep their customers after they throw all these ads at them, but maybe they got some tricks up their sleeve. Talk to us about this.

00:32 Dan Howley

Yeah, they’re piloting uh ads right now and they’re pretty unintrusive. It’s not like, you know, you’re getting bashed over the head with pop-ups or anything like that. It’s kind of similar to what you would get uh with Google or something along those lines that uh you know, they they say that it’s a sponsored post or they say that it’s a a sponsored, uh, you know, piece. Uh they don’t include it as part of answers like, you know, your direct answer or anything like that. It’s kind of a a separate thing that they’ll end up showing.

00:54 Dan Howley

Uh so I I think that people would still rather do that, you know, than pay for the service. I think a lot of people that pay for it right now are folks that, you know, really want to dive into what they can do with with AI, kind of, you know, maybe building out uh web pages or, you know, taking advantage of agents, things along those lines. But for the average person, I don’t think they’re willing to to put, you know, an extra 20 bucks out there a month on something like this when they could just sit there and get ads. I mean, that’s how the internet’s been forever.

01:23 Dan Howley

Um and it’s how most models work. So, I think $100 billion dollars obviously, that’s no drop in the bucket. Uh but it also, you know, I mean, you have to look at how they’re able to do that, how they’re able to sustain that, um and how that’s going to uh be able to be used to help pay back uh the massive expenses they have. Now, they also are diving into the enterprise space. That could be a huge revenue opportunity for them as well, but, you know, they have that uh competition from Anthropic as well as, you know, Microsoft and Google. By the way, Google in the uh the advertising space, oh, and Facebook or, you know, meta, and then Amazon as well. So, you know, they’re going to have to muscle their way in.

01:58 Dan Howley

Uh but are one of the fastest apps that’s ever launched and so, you know, they could do that.

02:02 Speaker A

Well, so Dan, that was and that’s the thing is they were the fa fastest app to ever launch, but then they had all this competition show up and really good competition too. And maybe their next model, Chap GPT-6 steals the show and then they’re back on top. Maybe that happens, but where’s their moat right now?

02:16 Dan Howley

I think the moat is that they just had that real big first mover advantage. They, you know, that doesn’t obviously uh uh insulate them from anything. You know, I mean look at Microsoft, they had first mover advantage because of them. Uh and now, you know, you see the stock price down so much. Uh and there’s people talking about, well, co-pilot just really isn’t as good as as something like uh what Anthropic could put together perhaps. Um I think for uh, you know, OpenAI, it really comes down to and and all of these companies, what their latest model has.

02:44 Dan Howley

Now, I also do think it’s worth noting that these models are going to continually outpace each other. Uh there’s going to be one that’s smarter here, and then, oh look, this is smarter over here. And Google’s getting all the praise right now because of Gemini 3. Uh you know, but it’s it it’s going to change. This is definitely not a a one horse race. There’s also no definitive leader uh right now at all. We’ll continue to see them go back and forth. So, I think the moat really comes down to what they’re able to do in addition to Chat GPT while they have those that that huge number of eyeballs.