Key insights
- The author posits that Meta (META) is uniquely positioned to monetize AI, not just through its own chatbot development, but by leveraging the vast user data generated by AI interactions. Despite significant AI capex concerns, Meta's existing data infrastructure and advertising model could capitalize on the personal information gathered by AI chatbots, potentially leading to more efficient ad targeting and new revenue streams, even if they don't lead in AI model development itself.
I know there are massive concerns regarding META’s AI capex, but I really wonder if there’s a missed/slept-on monetization thesis for them. Legit so many people are using AI chatbots for help and advice with everyday things, and this is a massive amount of data that these chat logs can store regarding their users. Hell my wife and some of her friends use ChatGPT as their literal therapist. I’d argue AI chatbots have more personal information on the average user than any other platform and even anonymous forums.
The thesis of META has always been data. META already has significant information about people and their networks, but AI chatbots would expand their user data significantly further. META is pouring billions into developing its own chatbots which are admittedly way behind other AI models. However, they do have the direct infrastructure and network to maintain a “free” chat bot that competitors may not be able to because a free chat bot would substantially expand their data allocation empire. The play they’re currently making is to create better AI algorithms to consolidate user data to target their ads and make them more profitable. I think this is just an initial step to further increase the efficiency and targeting of their data analysis and make future expansion of their data pool more profitable and efficient. Even if they lose the AI race them being the leader in “advertising AI” could be either licensed to existing chatbots to continue to expand their ad business.
Just curious everyone’s thoughts.
TLDR: I think the true strength of LLMs is user data more so than replacing existing workers, and META’s targeted advertising AI allows for capitalization of the massive pool of user data on their platforms and potentially on competitor’s platforms. no other competitor is going as balls-deep as they are on this angle and I think this puts them in a potentially highly lucrative position a few years down the line.