I don't think this is about Google. This is about advertising being the make or break moment for OpenAI.

The problem with ChatGPT advertising is that it's truly a "bet the farm" situation, unlike any of their projects in the past:

- If it works and prints money like it should, then OpenAI is on a path to become the next Mag 7 company. All the money they raised makes sense.

- If it fails to earn the expected revenue numbers, the ceiling has been penciled in. Sam Altman can't sell the jet pack / meal pill future anymore. Reality becomes cold and stark, as their most significant product has actual revenue numbers attached to it. This is what matters to the accountants, which is the lens through which OpenAI will be evaluated with from this point forward. If it isn't delivering revenue, then they raised way too much money - to an obscene degree. They won't be able to sell the wild far future vision anymore, and will be deleteriously held back by how much they've over-sold themselves.

The other problems that have been creeping up:

- This is the big bet. There is no AGI anymore.

- There is no moat on anything. Google is nipping at their heels. The Chinese are spinning up open source models left and right.

- Nothing at OpenAI is making enough money relative to the costs.

- Selling "AI" to corporate and expecting them to make use of it hasn't been working. Those contracts won't last forever. When they expire, businesses won't renew them.

My guess is that they've now conducted small scale limited tests of advertising and aren't seeing the engagement numbers they need. It's truly a nightmare scenario outcome for them, if so.

They're declaring "code red" loudly and publicly to distract the public from this and to bide more time. Maybe even to raise some additional capital (yikes).

They're saying other things are more important than "working on advertising" right now. And they made sure to mention "advertising" lots so we know "advertising" is on hold. Which is supposedly the new golden goose.

Why drop work on a money printer? What could be more important? Unless the money printer turned out to be a dud.

Didn't we kind of already know advertising would fail on a product like this? Didn't Amazon try to sell via Alexa and have that totally flop? I'm not sure why ChatGPT would be any different from that experience. It's not a "URL bar" type experience like Google has. They don't own every ingress to the web like Google, and they don't own a infinite scroll FOMO feed of fashion like Meta. The ad oppo here is like Quora or Stack Overflow - probably not great.

I have never once asked ChatGPT for shopping ideas. But Google stands in my search for products all the time. Not so much as a "product recommendation engine", but usually just a bridge troll collecting its toll.

There is no moat in the models. The moat is in the UX. The problem is that OpenAI is far away from where the user is and not going to get there anytime soon. Google meanwhile is exactly where the user is.

OpenAI IMHO is a dead company at this point. They are overvalued relative to the fundamentals and don't appear to have any way of getting the numbers to work in the timeframe that their investors will expect. They are throwing stuff against the wall in the hope something sticks.

They are almost certainly looking for a bag holder. This will either be the retail investor via an IPO or the Federal government via "we are too big to fail".

I don't think one can both pull the fire alarm that AGI was a lie AND that if OAI has to act quickly. They can ride their current street rep the same way Kleenex did.

They do need to build a business, but they've got time to play the long game.

> - If it works and prints money like it should, then OpenAI is on a path to become the next Mag 7 company. All the money they raised makes sense.

Makes sense for whom? Certainly not the users. The entire purpose of ads is to change your behavior in ways that benefit someone else. In ad-based search, ads are at least visually separable (and blockable) but in a conversational AI they are indistinguishable and corrupt the entire trust relationship. When your chat "assistant" has a financial incentive to steer you toward certain products or answers every response becomes suspect. The users are no longer getting the best answer but the most profitable one as we witnessed this happen in search over last 2 decades. Not a way to build a long lasting business.