How could this possibly work? Google is profitable because they can insert ~4 ads into a search query. An LLM query costs about 2 orders of magnitude more resources to run than a Google search, so.. I'm not seeing it unless OAI can figure out how to shoehorn 400 ads per prompt into the interface somehow.
Longer sessions. You also have more potential for brand advertising compared to Google Search (which is mostly conversion ads). That being said, it's risky and can ruin your product if done wrong, but I think there are ways to do it right.
Only if the margins are negative. Yes, the cost to serve is most likely higher than Google's SRP, but I think the ads can be even better targeted and potentially have a higher CPM than Goog's.
What I'm saying is that I believe their ARPU could be higher than Google's, while what I think you're saying is that their cost will also be higher. I agree with that, but where we differ is that I think that while the margin will be lower, there is still potential to make a ton of money there.
Google doesn't have to fight context windows. They can cache and store an AI response to a Google query without having to worry about much other than locale etc. You can't do that a dozen messages into an LLM conversation.
And probably unsustainable. OpenAI desperately needs to catch up so they’ll throw yet more cash at it, while Anthropic are market leaders in this particular space.
Probably a lot? It would be much more tax-advantageous to do it this way, $50B worth of credits != $50B worth of spend on Amazon's part, and they might meet in the middle about how much equity that translates to.
You're Amazon. You give OpenAI $50B cash investment, they then hand you back the $50B over time because they buy $50B worth of Amazon AWS services (they would use AWS or other equivalent compute anyway). OpenAI pays an additional $1-5B in sales taxes on top of their $50B compute purchase. Now let's say you have $25B opex for said compute. You then have $25B profits, you pay 21% corporate taxes on the profits, so you too owe the government about $5B. Government collects around $6-10B on this whole transaction.
Situation B:
You're Amazon. You let OpenAI use your services by handing them API credentials that unlock what would normally cost $50B worth of services, but no money changes hands. You have zero revenue from the transaction, write off the $25B opex as a tax loss on your other profits elsewhere in the company. You thus pay ~$5B less tax on your other income as a company, and OpenAI also doesn't have to pay sales tax because they didn't actually purchase anything.
It depends how you defined “consumers”. If you mean “those who consume the good subject to the tax, rather than people who resell the good”, yes, ideally.
If you mean “not businesses” or “individuals but not corporations”, then, no.
> Ie companies reverse charge sales tax or omit it entirely.
Generally, the theory of sales taxes is that people (including corporations) pay sales tax on things they consume as a final good rather than use as an intermediate good in production or simply resell. The exact way in which that is determined varies somewhat between jurisdictions with sales taxes, but generally (assuming paper is subject to sales tax in a jurisdiction), if you are buying paper to print books that you sell, you don't pay sales tax, if you are buying paper to print internal documents that you use in running the business, you do pay sales tax.
That’s interesting, that’s not the case in the EU. Here, as long as you can argue that it’s a business expense, you don’t have to pay sales tax. Eg the internal documents are a necessary expense / cost of doing business.
My understanding is that EU nations all have VAT, not sales tax; both are broadly consumption taxes, but they function rather differently (VAT charged at each stage of production vs sales tax only at final sale to consumer, among other differences.). VAT is sort of opposite of sales tax for businesses as payers; they pay VAT on goods bought as production inputs (and collect it on behalf of government on items they sell downstream on the chain of production), but do not pay it on what they consume for internal operations (in effect, to the extent thise internal operations contribute to the value added to the product, that is what the people downstream in the chain of production are paying VAT for.)
When I worked on Google Ads, we used time series forecasting to compute the odds of an ad campaign reaching its goal (and to tell users how likely they were to hit them).
A ton of (unsophisticated) advertisers would just draw a line from zero to the number they are at today and project that line to the end of the month to forecast the amount of conversions/spend they were going to hit. This of course doesn't take into account various seasonalities (day-of-week, time-of-year, etc.) and gives you a pretty poor forecast. Compared to those, time-series forecasting is much more accurate.
Is it perfectly accurate? No, that's impossible. But when you can train a model on all advertising campaigns, you can give good 95% confidence intervals.
https://9to5mac.com/2026/03/02/some-apple-ai-servers-are-rep...
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