[N70Phone]

> does work for Google and Meta

I will point out that this is contentious, both of these companies are subject to regulatory investigations around their monopolistic practices & the matter that they are pretty much the only companies for which this is profitable.

> Their model, today, is far more relevant than calling back to antiquated banner advertising models from 25 years ago

Hardly. It's fundamentally the same model; Content with an advertisement next to it. Whether that is a literal banner ad or a disguised search result, none of the formfactors are new.

For all the advances in ad-tech, CPMs are still the same old dogshit they were shortly after the dotcom bubble, looking better only because of inflation.

> you'll have to convince me that Google and Meta's model cannot work for OpenAI, which you have not adequately done.

That's the "orders and orders of magnitude more expensive" part. Neither Google Search nor Facebook are that profitable per single ad, they make it up in volume. LLMs are simply more expensive to operate than a search engine or a glorified web forum. Can OpenAI cut down their opex and amortized-cap costs down to less than the half-penny they'd extract with good CPMs? Probably not.

But there's a deeper layer. The "fund AI with ads" model paints a scenario in which OpenAI would have to overtake Google; They need the ad-tech monopoly to push up CPMs or you can cut that half-penny down an order of magnitude.

This is unlikely. To make ChatGPT work as a search engine requires all the infrastructure of a search engine. Ipso-facto they are always more expensive than a standalone search engine.

Yet at the same time, people only care about ChatGPT as search because Google Search is shit now. Were ChatGPT to ever become a serious threat to Google, Google can simply turn off the search-enshittifier for a bit and wipe out ChatGPT's marketshare, and push them into bankruptcy by drawing down CPMs below OpenAI's sustainability level.

[famouswaffles]

>That's the "orders and orders of magnitude more expensive" part.

It's not orders of magnitudes more expensive and if we take the most recent report for the half year, then they need a per quarter ARPU of $8 for their free users to be profitable with billions to spare. That is low. This is not some herculean task. They don't need to 'overtake google' or whatever. They literally don't need to change anything.

[N70Phone]

You can't average out the userbase like that because the individual usage of the service varies wildly, and advertising revenue is directly tied to amount of usage.

Especially because OpenAI highly inflates user figures.

> It's not orders of magnitudes more expensive

This too is skewed by averaging with users who barely use the service.