Here’s a question:
Gen AI costs a lot. It will inevitably change the world, but the question is how much money it will be able to generate.
Back then when internet came and reformed the world, it has opened a completely new market.
Let’s talk big here – advertising.
Of course AI is opening a lot of new markets, but small markets. It is essentially an improvement on the internet. But how will it disrupt the advertising market?
Population growth is slowing down. Almost everyone has a smartphone now, and almost everyone spends as much time on the internet as they can. Maybe there is growth until gen X gets completely replaced, where really almost everyone will actively use the internet for everything.
My question is at the current status of the world, is it the case of large companies stealing each others share from the market, or there are still parts left from the cake?
In limited people in the world, with limited people left to conquer, everyone having smart phone, watching the maximum amount of ads people tolerate, what’s left to get? The only way I see here is to sell more expensive ads. How can companies keep up with the extreme growth rate we seen in tech so far?
Maybe AI can create even more accurately targeted ads, with extremely high conversion rate, in which case ads can be sold for more, but still there won’t be that much more people to show more ads to. Can the ads performance justify the massive costs of AI, or it’s just the case of every large company burning up their money on AI just to cover their existing shares from the market, in which case I can’t see uptrend there, just a massive bear market.
In any case, I see Meta a very strong player here, the disruption of making LLAMA open source was just brilliant, strong on ads, and one of the earliest players in the ai game.
What do you think?
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