Anthropic has trained its guns on OpenAI over its announcement of introducing ads in its chatbot, but some tech executives are enthused about the new development.
Max Levchin, co-founder of PayPal and CEO of Affirm, offered a contrarian take on the TBPN podcast, dismissing what he calls “industry pearl clutching” over advertising in AI chatbots. While much of the tech world debates whether ads will corrupt the user experience or compromise AI’s utility, Levchin sees the revenue model as not just inevitable but essential—a lifeline for an industry racing to fund its own explosive growth.
“I think there’s quite a bit of industry pearl clutching around ads and chatbots,” Levchin said. “I think that’s the best thing that’s going to happen to this industry. Everyone is holding their breath around, on the one hand, will AI kill software, software eats software, whatever. Well, will we be able to afford this giant build out so these models can get smarter?”
His answer cuts through the anxiety with a simple observation about internet economics: “Guess what? We make most of the money on the internet—not us, but most of the rest of the internet makes money with ads. And so ads in this single faceted growing piece of the internet wouldn’t be such a bad thing for people that need a lot of capital.”
Levchin isn’t naive about the concerns. “I, for one, welcome the ads and bots so long as clearly delineated ethical concerns and all that stuff,” he noted, acknowledging the guardrails that need to be in place. But he’s also bullish on the timeline. “I think it’s coming fast and I think so far most people have under predicted the pace of these changes.”
Levchin’s perspective arrives at a pivotal moment for the AI industry. The capital requirements for training and running large language models are staggering—the top labs spend hundreds of millions annually on computing infrastructure alone. Meanwhile, the path to profitability remains murky for most players. Google has already begun experimenting with ads in its AI Overviews search feature, and Meta has long funded its AI research through its advertising empire. OpenAI’s recent move signals that even the industry’s most prominent startups are recognizing that the traditional internet business model may be the only sustainable way forward. For an industry built on the promise of transformation, the irony is hard to miss: AI’s future may depend on the same revenue stream that’s powered the web for decades.