This approach makes a lot of sense. Advertising is a marketplace and this is a great way to bootstrap advertising inventory. Its inevitable they will allow advertisers to manage ad spend directly through OpenAI but right now the product is too new to capture meaningful ad budget. This way they can begin testing delivery and develop proof points around ROI and build towards larger ad spend directly.
Clearly the Meta execs they hired are about as useful as most 3-letter exec titles because, wow, did OAI miss the boat again. Personally I'm glad they've made as many missteps as they have, but quite the amateur move to not seize the market opportunity and keep it holistically for themselves. They took nothing from Google's paved road of incumbency in this segment.
Again, personally, I'm glad at yet another miss by Altman. But to claim ChatGPT is too new? Apparently hundreds of millions of users doesn't cut it these days. And if anyone thinks OAI has been anything remotely "strategic" around their product, well... Then you must enjoy shooting darts in the dark.
This appears to be more like a toxic rant than a reasonable argument.
> quite the amateur move to not seize the market opportunity and keep it holistically for themselves
What does this even mean? There are so many businesses, especially in the advertising world, that first start white-label reselling so that you can scale up super easy and quickly. Then once market is captured, you integrate everything. This is a common adtech playbook, and the Meta execs know that as well.
And I say this as someone who founded & exited their own adtech platform.
I would not recommend OpenAI to start developing an RTB platform right now at all. Just first prove there is a market and the value is there.
> They took nothing from Google's paved road of incumbency in this segment.
Google bought / acquired themselves into the online adtech market mostly. Yes they have adwords, which was only really becoming something a decade after Google launched, which they paired with their acquisition of half the adtech giants (DoubleClick, Invite and AdMeld). So yeah, not a great example.
> I'm glad at yet another miss by Altman. But to claim ChatGPT is too new? Apparently hundreds of millions of users doesn't cut it these days.
> This appears to be more like a toxic rant than a reasonable argument.
Thank you for your subjective analysis.
> What does this even mean? There are so many businesses, especially in the advertising world, that first start white-label reselling so that you can scale up super easy and quickly. Then once market is captured, you integrate everything. This is a common adtech playbook, and the Meta execs know that as well.
This would be interesting if any of it were true in the case of OAI. They haven't captured the market and they don't appear as if they will. They're at the losing end of Anthropic and Google right now. The Meta execs OAI has don't understand the game today, in my opinion based on their approach.
> And I say this as someone who founded & exited their own adtech platform.
> I would not recommend OpenAI to start developing an RTB platform right now at all. Just first prove there is a market and the value is there.
So OAI, their financials, their business models, their number of customers and their competition all aligned with your exit in adtech? Somehow I doubt it, but feel free to share.
> Google bought / acquired themselves into the online adtech market mostly. Yes they have adwords, which was only really becoming something a decade after Google launched, which they paired with their acquisition of half the adtech giants (DoubleClick, Invite and AdMeld). So yeah, not a great example.
Actually, it is a good example. Because when Google did this they had zero competition. Now Google is the competition. So, yeah... In line with the new reality. You don't get to compare OAI with Google 20+ years ago.
> This is just a useless attack for no reason.
No, it's reality for a lot of us. Altman is tied to a lot of unsavory players. If you want to apologize for these types of people then feel free to be their cheerleader. The great part of HN is that these comments have and carry market sentiments (all across the board). I could say your comments are useless, out-of-touch, founder drivel... But I haven't.
> product is too new to capture meaningful ad budget
I disagree entirely. As someone who works in advertising every single company I've talked to would be queueing up to test ads on ChatGPT if they launched a Google Ads like platform.
If ChatGPT doesn't have enough scale to do it, then they shouldn't do ads.
ChatGPT has more web traffic than X, Reddit, Bing... Crazy to say they wouldn't be able to capture meaningful ad budget. IMO partnering on this is a blunder.
It comes together quickly, though. They don't need to learn how to become a company that knows how to sell advertising; they can instead just pay some other entity to do that.
It's OK to not have complete vertical integration. (They probably don't fix their own toilets, either.)
And if it makes as much money as it seems must be possible, then they can just buy one of the advertising partners that are already have plugged into their system and shitcan the rest.
middlemen taking fees is not the measure for comparison, the question is whether you could run your own ad business for your own platform and keep your costs lower than established players who sell on all platforms. the answer is generally "no"
look how much money coca cola makes, and they sell it cheaper than water and still pay for advertising!! we should all make our own coke and not advertise it...
Established players aren't selling on all platforms. Any platform doing more than $1bn in ad revenue operated their own ad sales platform.
The only players that sell through third parties are sub-scale publishers, and that is a shit business to be in. If that's what OpenAI is aiming for then they will never be able to compete with Google.
I'm not really sure what you're analogy about Coke is meant to mean here...
They probably want to select for high-quality ads without having to be responsible for filtering issues, whether false positive or false negative, which will adversely affect their reputation with consumers and advertisers. They probably wait until they have enough data/experience to do that properly.
I agree with you, but IMO the details are too sparse here to figure out what's really happening. Still, it feels very dangerous to try to go the reseller route first as you lose a ton of control and become dependent on your partner to support all the feature you add yourself in a timely fashion.
It all seems a bit overly complicated to me. TikTok pretty much went straight to a self-serve platform and basically had immediate success. I would think if OpenAI did something similar there would be no shortage of advertisers wanting to spend money.
on tiktok you are not paying for ad inventory, which on that platform sucks, you're paying $10m+ to tip the scales in the algorithm towards organic content about your brand
i assume the 22 year olds working 16h days at openai sincerely think people pay for ads on tiktok, and shitty low converting ads is why tiktok makes tons of money, and they sincerely think the solution to their lack of knowledge is delegating their core business to a DSP no one has ever heard of
I find it a good surprise. Signals they probably don't want to become an advertising company, which is what every other tech business ended up becoming. And that is not against having ads be a core revenue driver, like for companies in other sectors.
I guess OpenAI couldn't train AdManagerGPT to ignore the client (except when it's time to renew), suggest more ad spend, and turn off any of the features that let you control your budget.
It's just surprising, since it's objectively better to own the platform, and the company has a mind boggling amount of money, and allegedly coding agents capable of 10xing developer output. Why would they not be able to do it in house? It shouldn't be a capacity or capability issue.
That makes me think it's just another higher level money game, and there will be some weird investments in which neither company does anything of material value in exchange except spin some number wheels.
Ad networks / information brokers in general would be too sweet of a prize to pass up. It’s a weak link in the chain, if they’re not exploiting it they’re not doing their jobs. Being foreign data is a bonus.
The missing part seems to be that they need infusions of money to keep this “business model” running a little longer. In this world if you want prompt money and lots of it, advertising is the way.
Naive question - let's assume this all becomes a really competitive market and 10+ companies are pumping satellites into orbit.
Are we going to run out of space?
At some point it probably makes the most sense for there to be one wholesaler of satellite connections and then many retailers right? The market skews towards being an international natural monopoly, right?
It would be incredibly unlikely for there to be enough competition at a grand enough scale for it to become a problem. Space is just very big. Earth's surface is ~197 million sq miles. If you move up to a LEO shell at around 550 miles up, the surface area of that sphere is 34% larger than that.
If you were to distribute 100,000 satellites across that shell, each one would have 2,600 square miles to itself. That's like having a single car in the entire state of Delaware. Mind you, that's if we are only considering a 2-D sphere, but space isn't 2-D you can space your orbits between 550 and 650 miles, with each 1 mile vertical increment acting as a "floor" or passing lane. You can now multiply your 265 million sq miles by 100x.
The issue isn't space, it's traffic management. Satellites zipping around at 17,000 MPH would make one hell of a debris field if even one pair of them collide. That's the Kessler Syndrome boogie man everyone is worried about.
> Mind you, that's if we are only considering a 2-D sphere, but space isn't 2-D you can space your orbits between 550 and 650 miles, with each 1 mile vertical increment acting as a "floor" or passing lane. You can now multiply your 265 million sq miles by 100x.
Yes but don't forget that orbits decline and only satellites with onboard propulsion have the ability to boost them back up. Everything else like cubesats and random debris doesn't and thus doesn't "stay in their lane".
> Mind you, that's if we are only considering a 2-D sphere, but space isn't 2-D you can space your orbits between 550 and 650 miles, with each 1 mile vertical increment acting as a "floor" or passing lane.
Sure, but satellites in a higher plane will need to navigate satellites below them during de-orbit. Conversely, satellites in a lower plane will likely need to avoid non-functional satellites that are uncontrolled as their orbit decays.
How much mental bandwidth do you put into not hitting a car that's in a different city? Even if all 100 layers collapsed to one, that's still only 100 satellites in 2600 square miles. NYC is ~300 sq miles. There are about 2.2 million cars there. I feel like you still aren't grasping how much space we are talking about.
But crashing in LEO is not as disastrous as GEO or higher. It's an unstable orbit so eventually everything will deorbit, crash, and burn. May take a while though.
In a certain sense, we do. Pumping thousands satellites to LEO increases probability of triggering the Kessler syndrome. Luckily, LEO orbits are also self-cleaning on reasonable time scales (decades), so I think that some day we will trigger it (potentially, with some "help" from anti-satellite weapons) after which some kind of international regulation will be introduced to prevent repeating it in future.
I'd say there's plenty of room for competitors along multiple dimensions: Geopolitical security (this alone will probably preclude a single monopoly), price and lack of a moat (once a monopolist starts jacking up prices, there's an immediate incentive for an alternative), delivery profile (store-and-forward for IoT-like use cases vs. dumb pipe vs. in-space forwarding), frequency band (L- or S-band for direct to device vs. Ku/Ka band requiring directional terminals) etc.
The only thing that's actually scarce and that could be monopolized rather easily is frequency spectrum. In fact, I suspect this to be a frequency/operating license driven acquisition.
I disagree on some of those dimensions (esp. lack of a moat), but agree things like geopolitics and security would lead to multiple wholesale providers.
My concern is that globally international relations are an absolute MESS, but there really needs to be some level of coordination here.
As I see it, the moat for terrestrial (and in particular wire-based) last-mile comms infrastructure is that each additional customer connected is often expensive, and if they switch to your competition, that wire is basically a sunk investment.
For wireless, the dynamics are very different (as long as spectrum isn't monopolized). As soon as you have enough satellites launched for global coverage, you can compete for all customers, and each one that switches away to the competition is more bandwidth available to you to undercut your competitor on pricing with.
On HN, the standard response is that earth-based observation is lesser than space-based.
Which boils down to "Use something incredibly expensive that we have very few of, instead of something that we have a number of that is comparatively cheaper. How dare you question the holy, sacred internet!"
During the Artemis launch it was very briefly mentioned that the launch window isn't a continuous window, but a series of windows interrupted for short times. I wondered if that was because of the thousands of satellites in orbit.
Don't get me started. So many existing laws just seem to be conveniently ignored because... it's 'digital'?
In a lot of countries there are specific laws banning the deliberate targeting of advertising to children (and in contexts where you would reach children, heavily regulated), but for over a decade Meta would allow you to target within the ranges of 13 to 18 years old.
That's to say nothing of the scams and deepfake celebrity ads they let run. Imagine if a deepfake ad of Warren Buffet promoting an investment opportunity ran on TV, the network would get sued into oblivion. On Meta though, there's no repercussions.
A bit of a moving target there, especially with the definition of medium data on disk considering the rise of high speed NVMe vs spinning metal. Makes me wonder if the 00s 'Big Data' era and the resulting infra is largely just outdated now...
Not really a comment on laptops, but I recently built a new desktop for the first time in nearly two decades. I'm sure that there has been some innovation in the space, but overall I was surprised that everything just seemed... the exact same?
PCI slots are from the 90s.
DIMM from the 90s.
SATA from the early 00s.
LGA sockets from the mid 00s.
In almost every category meaningful differentiation is a myth. It sounds nice to tell yourself you've got it and talk about moats or whatever, but it misses the point.
What people usually mean when they talk about differentiation is distinctiveness [1]. Design isn't a differentiator for these watches it's about being distinctive. At the end of the day when telling the time is commoditized, and expensive watches are just a status symbol it's all you've got.
Less secure, lower margins (more middlemen taking fees), harder to access, more likely to not work properly.
I would expect all the meta execs they've hired to know better so maybe I'm missing something...
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