Lumian Gen AI Newsletter Issue #54

Welcome to the 54th edition of the Lumian Weekly Gen AI Newsletter!

For years, the internet has been like an all-you-can-eat buffet, where we get to enjoy unlimited content for "free." Sure, we all say we hate ads, but the truth is they’ve been paying the bill for all this content. By giving up a bit of our attention to advertisers, we didn’t have to pay real money to access websites, blogs, and videos. The ad-based model wasn’t perfect, but it funded the internet as we know it—and we were all okay with that.

This system created giants like Google and Meta, companies that built their fortunes by matching advertisers with our attention. Even the small players—niche websites, blogs, podcasts—have been funded by ads. It’s been a well-oiled machine that made the open web possible and kept everything running smoothly.

But nothing lasts forever. And now, with the rise of AI, the ad-based internet is in serious trouble.

Here’s the big problem: AI tools like ChatGPT and Perplexity are becoming our go-to for getting quick answers. Instead of searching Google and scrolling through websites full of ads, we just ask AI and get the answer we need right away. This is great for us—but bad news for the internet's ad-supported business model.

Each time you skip visiting a website and get an answer from AI, there’s one less ad that gets shown. And as more people turn to AI for answers, fewer ads will be seen, meaning less money for the websites that depend on those ads to stay afloat. If AI takes over more tasks for us—like booking appointments or buying things—it will pull even more attention away from the web, drying up ad revenue even faster.

So, what happens when this “free” content we’ve been enjoying can no longer be supported by ads? The open web, as we know it, starts to shrink.

Not all content will disappear, though. The most valuable, high-quality content—like premium news, streaming services, and top-tier subscriptions—will become even more important. As ad dollars vanish, those who can afford to pay for the best content will still get it. In fact, they’ll probably pay even more for it, since demand for premium content will rise when there’s less free stuff around.

We’ll likely see companies that used to rely on ads—like Reddit—shift to selling their data to AI companies for training purposes. This way, they can make money from the AI boom. But the middle-of-the-road, ad-supported content—the blogs, niche sites, and small creators—will struggle. Many of them will switch to subscription models, meaning we’ll have to start paying for access to content that used to be free.

This shift will deepen the divide between those who can afford premium subscriptions and those who can’t. For people who can’t or don’t want to pay, parts of the web will disappear behind paywalls, and free content will become harder to find. The gap between the “haves” who can afford content and the “have-nots” who can’t will grow wider.

Meanwhile, AI services will try to replace traditional ads with something new. Some companies are already experimenting with putting ads directly into AI responses or offering paid sponsorships for AI-generated recommendations. So, even if you’re not searching the web like you used to, you might still encounter ads embedded in the tools you use. But it’s unclear whether these new forms of advertising will work as well as the old ones, or if they’ll make up for all the lost revenue that ad-supported websites used to generate.

Interestingly, publishers and content creators won’t just let AI take their content without compensation. Some websites will start charging AI companies every time they scrape or use their content to generate responses. Bigger companies like OpenAI might strike deals with news outlets and media companies to access their content, but smaller websites will likely partner with third-party services that help them charge AI tools for access.

So, the future internet won’t just charge us, the users, more directly—it’ll charge AI companies too, creating a new economy where content isn’t “free” for anyone, human or machine.

When we look back on the early days of the internet, we might realize that we were living through a golden age of free content. For a couple of decades, the internet felt open and endless, with a world of information and entertainment at our fingertips, paid for by ads we mostly ignored.

But the internet is evolving, and we’ll adapt along with it. There will still be plenty of valuable content to enjoy and we’ll have to get used to a new way of paying for it. And who knows? Maybe one day, we’ll look back fondly on those annoying ads and realize they were what made the wild, open web possible in the first place.

Happy reading! 📚🤖🎵

In this week’s issue:

• News Flash: AI Nobels, ChatGPT’s Canvas, Meta’s Movie Gen

• AI Frontier: AI Software Cost/Time Estimation tools you can use today

• Fundraising: The biggest deals in AI

• Nerd Out: Technical and Business Content for Everyone

🚀 AI in Practice

Cutting-Edge AI Software Time/Cost Estimation Tools You Can Use Today

• CostGPT - Estimate software cost, time, features, and more to build faster

• Allcancode - Time/cost estimation for new software product