As AI costs soar, chatbots edge closer to an ad-filled future

As AI technologies advance, the chief executive of advertising agency Criteo predicts that many platforms will eventually incorporate advertising, according to AFP journalist covering the Web Summit in Lisbon on November 12. Speaking to Reuters, Michael Komasinski explained that advertising is the most scalable business model and has supported the growth of major platforms like Google, Meta, and Snapchat.

Komasinski highlighted that ad formats will continue to become more innovative and tailored to conversational experiences.

Pressure to generate revenue due to the high costs associated with AI development is driving companies to explore advertising options. OpenAI, the creator of ChatGPT, began testing ads in the United States for free and low-cost tier subscriptions in February, in collaboration with Criteo. The company subsequently rolled out ads worldwide, gradually increasing its presence in the market.

Rival AI company Anthropic, set to go public soon, has chosen not to integrate advertising in its AI tools due to data protection concerns and a desire to protect user interests. Microsoft, meanwhile, has been utilizing ads in its public version of Copilot AI since 2023, while Perplexity has experimented with ads in the United States since 2024. Google is also considering incorporating ads into its Gemini AI platform.

The development and deployment of AI models require significant investments, making the endeavor even more expensive due to recent investor concerns. Inflation and high interest rates have made the sector even pricier, causing both equity and bond investors to grow more cautious. Despite the rally in AI-related stocks this year, Komasinski remains skeptical about AI agents being able to autonomously make purchases, stating that while it is easy to order unimportant items, delegating important decisions to bots is not advisable.