AI Search Threatens Internet Business Model
- Traditional search economics are at the core of how the internet functions, but this is changing due to AI.
- Apple is actively looking at revamping Safari to focus on AI-powered search engines.
- Apple believes that AI search providers like OpenAI, Perplexity, and Anthropic will eventually replace traditional Google search and intends to bring these options to Safari.
- Apple has already had some discussions with Perplexity about adding them to the platform.
- Apple feels that the search segment is more wide open than it's ever been because of new entrants attacking the problem in a different way.
- The switch to AI search is inevitable given the amount of money and large players involved.
- Apple expects to have AI search options in Safari by the end of the year.
- Search volume on Safari declined for the first time ever last month, which Apple attributes to increased AI use.
OpenAI's Revenue Sharing
Key takeaway: Early investors in OpenAI, such as Microsoft, are poised to reap significant financial benefits due to revenue-sharing agreements, resembling deals seen on Shark Tank.
- OpenAI's deal involves sharing 20% of its top-line revenue with Microsoft, along with 49% of profits capped at $92 billion.
- OpenAI anticipates reducing the revenue share to 10% by 2030.
- If OpenAI meets its 2030 revenue goals, Microsoft could potentially earn $97 billion solely from the revenue share.
- Austin Allred compares the 20% top-line revenue share until 2030 to something seen on Shark Tank, highlighting its unusual nature.
Search Reduces Website Traffic
- Search now answers 75% of queries without users leaving the search engine.
- This reduces traffic to content creators, threatening traditional monetization like subscriptions and ads.
Zuckerberg's AI Ad Automation
- Mark Zuckerberg plans a fully automated AI that creates and tests thousands of ads to optimize social media advertising.
- This approach targets efficiency in direct response ads, not brand-building creativity.