The artificial intelligence (AI) arms race continues to heat up—as developers begin to see solutions for monetization come into focus.
Key Details
- AI has rapidly grown and proliferated in the past five months as major tech companies and startups rush to change the market.
- As we previously reported, the challenge of monetizing AI is rooted in how it can create profit from free chatbots released publicly onto the internet.
- Implementing solutions will be the most important step in making the AI arms race a profitable endeavor.
- Traditional wisdom says advertising will play a large role in monetizing, but subscriptions, plug-ins, and data licensing hold the most likely path for success, The Wrap argues.
Why It’s Important
Advertising is the most common form of monetization on the internet, with services like Google and YouTube drawing the majority of their profits from pre-roll commercials or clickable product links accessible throughout articles. However, AI developers have already turned down the idea. ChatGPT developer OpenAI says it has no plans to integrate advertising into the interface or allow the chatbot to respond to inquiries with ads.
The most profitable alternative would be to operate AIs the same way tech companies operate cloud services—providing the infrastructure and support that allows smaller startups and applications to take advantage of the core technologies for a licensing fee. This will also facilitate new innovations by allowing startups to experiment with the core functionality of AI and test new applications.
As we previously reported, ChatGPT already had 100 million active users by February when the service launched as a subscription service—marking one of the most successful and fastest product launches in history following its November 30 debut. ChatGPT-enabled Bing, Google’s BardAI, and Baidu’s ErnieBot stand to reach similar peaks—similarly selling subscriptions and implementing the service into new digital products.
Notable Quote
“Advertising is a good way to make money when you build an audience, and chatbots have done that. But AI chat works because it feels like a conversation with another being, not a computer, and ads spoil that experience. Steve Jobs, while developing Siri, refused to build thumbs-up or -down feedback buttons into it because he feared breaking the illusion. Siri has struggled since Jobs’ death, but his intuition was right,” says WrapPRO contributor Alex Kantrowitz.