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Ben Ross | Propel Ventures Co-FounderApr 10, 2024 10:57:21 AM2 min read

Title: Navigating the Shift in Search: Monetisation, AI Costs, and Business Visibility in the Age of ChatGPT

In the digital age, the search landscape is undergoing a seismic shift. As AI-driven platforms like ChatGPT emerge as formidable contenders to traditional search engines such as Google, questions about sustainability and monetisation strategies come to the fore.

How will Chat GPT make money?

Google's success has been underpinned by its robust advertising model, generating revenue while facilitating user access to information. However, with the advent of ChatGPT, the paradigm appears to be shifting away from advertising towards subscription models. The question then arises: Is subscription a more sustainable avenue for monetisation compared to advertising?

AI search is really expensive compared to conventional search

The operational costs associated with AI-driven search are significant. Recent discussions, including considerations by Google to introduce charges for AI-powered searches, highlight the financial implications of the technology's energy consumption. This idea of charging for AI search was raised in this recent FT article. According to the International Energy Agency, an AI search consumes tenfold the electricity of a standard search, underlining the necessity of effective monetisation. This recent AFR article captured the issue well.

The interesting angle here is that Bing might have a competitive advantage vs google because it's AI powered search is not costing it as much as google's AI powered search because it still only has such a small proportion of global search volume. I suspect that someone at Bing and google is watching their COGS and getting nervous!!

The financial backbone of Google has enabled substantial investments in technology and engineering, fostering advancements with widespread benefits. This underscores the critical nature of monetisation not just for operational sustainability, but also for continued innovation and being able to offer a great service. What I am saying here is that I think it is very important for these players to make sustainable profits from search so we have a sustainable great search service offering.

Could NVIDIA's advancements make search cheap again?

As we ponder the future of AI in search, the conversation extends to the cost dynamics and potential for new business models. Could advancements in technology, such as NVIDIA's chip improvements, usher in cost-effective AI search capabilities that negate the need for subscription or advertising models?

How can I get found in AI search as a business owner?

Moreover, the question of visibility for businesses within AI-driven search platforms remains paramount. Traditional search engines have developed models for paid inclusion, offering companies a pathway to be found online. With ChatGPT, the absence of such a model presents a challenge for businesses seeking to maintain visibility in AI-powered search results. This presents an opportunity for innovative approaches to emerge, potentially moving beyond the conventional advertising model.

As the search landscape evolves, the path forward for monetisation, operational sustainability, and business visibility in the age of AI-driven platforms remains a subject of intense speculation and opportunity. The industry stands at the cusp of transformative changes, promising new models for search that could redefine online engagement and accessibility. I can't wait to see what model innovation will come next to support this transformative shift in AI.