Limiting Advertising on AI Platforms Would Be a Mistake

The internet was built on advertising, but some are now pushing to preemptively restrict ads for artificial intelligence (AI) platforms and services. It’s a mistake. Options are good, including the option to choose ad-supported services where they exist. 

AI services such as ChatGPT have offered somewhat limited free tiers and much higher capability behind paywalls, but reports have indicated that OpenAI is considering offering advertising-supported versions of ChatGPT. That has caused some to decry ad-supported options and suggest preemptive limits on those choices. Anthropic’s Super Bowl ads, for example, paint ad-supported AI as inherently negative—but that is easy for a company that does not have much of a consumer-facing business to say.  

Yes, sometimes ads—in every setting and medium—can be intrusive and annoying, and there are understandable concerns about the data collection needed to make ads work online. However, the benefits are enormous. Digital advertising is the reason we can all use highly-reliable online communications and research services such as Instagram, Google Search, Etsy, LinkedIn, or even Netflix and Amazon for free or at a significant discount. 76 percent of small businesses report that losing online advertising would harm their ability to effectively market their products and services and to grow their business. 

The massive amounts of online content used to train AI models also wouldn’t exist absent advertising-funded platforms. For the past decade, tech companies have spent more than $100 billion annually to provide the services we all use.  Would society really have been better off had policymakers required that money to come directly out of consumer’s wallets by imposing sweeping restrictions on online ads from the start? That cost-benefit analysis is really tricky. 

But one thing is clear: there is no free lunch. Someone has to pay for all those platforms and all that content. AI services are no exception: just four tech companies are on track to spend more than $600 billion on infrastructure investments this year. Advertising already indirectly funds much of this investment, as companies like Google and Meta spend money on AI that they earned from their advertising businesses. 

Ads shifts these costs away from consumers and toward businesses who want to reach them. If ads are discouraged or disallowed for the internet or AI service, the paywalls will just get higher, tighter, and a lot more expensive. It does not benefit the public to make them pay more than they otherwise might by limiting choices through prohibitions on business models.

To be clear, paywalls and variable pricing schemes aren’t inherently bad, either. They can directly fund and even cross-subsidize services. Traditional media companies have used subscriptions for decades, of course. But paywalls should not be the only option. People’s preferences vary greatly, meaning we all benefit from a diverse array of business models that give creators, innovators, and the public more choices.

The beauty of the internet and online marketplace is that many hybrid options do exist and have provided us with an unprecedented outpouring of content, information platforms, and communications opportunities. This was an amazing achievement and it moved our society—in just one generation’s time—from a world of information poverty to one of information abundance. To the extent people complain about information availability today, it is usually to protest information overload, not scarcity, as we did in the past. But abundance is a very good problem to have! 

Ad-supported services helped make that miracle happen, and advertising could also help make many AI-related platforms and applications more accessible to the masses. It’s easy to say people should directly pay for the services they want when you’re flush with cash – but we should want the benefits of AI tools to be available to those who are more price-sensitive, too. Advertising makes that possible. 

AI businesses should be free to compete with different business models to see what consumers prefer. Indeed, the development of new ad-supported AI business models shows that we have a healthy, competitive and innovative AI ecosystem. It is yet another sign of continued U.S. AI leadership. Bring on the ads.