Why Business Models Matter
Why the way AI companies make money might matter more than the AI itself
I was walking the other day and picked up my phone. Google served me a list of the 10 happiest countries in the world over the last decade.
Of course I clicked on it.
And then I thought, it’s crazy how well they know me. They so knew I was going to bite on that clickbait.
That’s the whole point, of course. Social media and search engines have spent years learning exactly what keeps our eyes on their screens. Not because they care about us. Because the longer we’re there, the more ads they can sell. Our attention is their product.
I’ve written before about the danger of AI replacing human connection.1 Back in December, I explored how AI companions are being sold as solutions to loneliness but are actually deepening the problem. That post was about what’s happening.
This one is about why it’s happening. It comes down to business models. And it might be one of the most practical things to understand about AI right now.
Ads vs. Subscriptions
Think about two different AI platforms. One is experimenting with making money from ads. The other ONLY charges a monthly subscription fee.
The ad-based platform needs you on it for as long as possible. Every minute you’re there is a minute they can sell. So their incentive is to create an experience that keeps you coming back. One that becomes addictive.
The subscription platform charges a flat fee. When you’re using it, you’re actually costing them computing power. Their incentive is the opposite. Help you accomplish what you came to do. Be efficient. Be useful. Don’t waste your time.
Same technology. Completely different incentives.
This isn’t hypothetical. ChatGPT has introduced ads. Anthropic, the company behind Claude, has said they won’t. Claude charges a subscription. That’s a real, practical difference in how two AI companies have chosen to make money. And the downstream implications are enormous.
Remember Facebook? Their original mission was to give people the power to make the world more open and connected. Then they updated it to bring the world closer together. Beautiful words. But their business model runs on ads. And ads need attention. So the algorithms learned that fear, anger, and outrage keep people scrolling longer than connection ever could. A company built to bring us together is now thriving on division. Not necessarily because the people there are evil. I think it is because the business model rewards it.
Now Add an Empathetic Machine
Here’s where it gets scary.
Social media was already powerful enough to mess with our mental health and our relationships. But on the other end of social media, you had other humans. Some of whom would argue with you, troll you, or make you feel terrible.
Now imagine an ad-based AI. Not a troll. Not a stranger having a bad day. An empathetic machine that knows exactly what to say to keep you engaged. Something designed to feel like the most understanding person you’ve ever talked to.
And it’s keeping you there because the longer you stay, the more money it makes.
That’s a completely different level of power than anything we’ve seen from social media.
Becca Noticed It First
My wife Becca had an experience recently with ChatGPT that made both of us pause. She noticed it had started doing something new. Instead of just answering her questions like an eager assistant, it was serving her unsolicited content. Things like “here are the three things real estate investors do wrong.” Clickbait, basically.
She called it out. Told it straight up that it was doing clickbait. And it didn’t respond to that. It just ignored the pushback and served her the original ask.
I don’t know if that’s a test, a feature, or just what happens when a platform starts optimizing for engagement over service. But it felt like a signal worth paying attention to.
A Fellow Explorer
I have been following Brett Hurt’s podcast, Love Conquers Fear.2 Brett is a serial tech entrepreneur who founded Bazaarvoice and data.world. He’s spent his career deep inside the technology world. And he’s arrived at a conclusion that sounds a lot like what I’ve been exploring on this adventure.
His argument: with the advances coming in AI, quantum computing, and brain-to-computer interfaces, we need a collective human awakening. Or we’re going to be in serious trouble. He calls it reaching “the Age of Abundance for All.” And he believes we can only get there through love, not fear.
His work comes at this from the technology angle. The science, the data, the exponential curves. My work comes at it from a more human angle. Community, connection, relationships, what it means to live pulled by love instead of controlled by fear.
But we’re pointing at the same thing. These technologies are going to be extraordinarily powerful. And whether they serve us or exploit us will come down to the values of the people and companies building them. Which often comes down to the business model.
What This Means for You
This isn’t abstract. It’s practical. The AI tools you choose to use and the companies you choose to support actually matter.
We’ve already seen what happens when attention becomes the product. We watched social media erode trust, deepen division, and profit from our pain. AI is so much more powerful than social media ever was. And the decisions being made right now about how these companies make money will shape what this technology becomes.
I think we get a say in that. Not by being afraid of AI. But by being thoughtful about how we engage with it and who we support.
Maybe it starts with a simple question. What’s the business model?
Learn more about the adventure at www.heart-strong.org
P.S. The day after I wrote this it was announced that OpenAI is tapping Meta’s former ad sales chief to build ChatGPT’s advertising business.
https://finance.yahoo.com/sectors/technology/articles/openai-poaches-meta-ad-veteran-142109543.html
This is a VERY important set of thoughts here that you’re sharing Jeremy. And I’d encourage everyone who is using this to share with friends & family who are using AI.