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AI Is Eating the World, But Who’s Paying for Dinner? (Thinks Out Loud 464)

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Mary Meeker’s latest report is out and it’s all about artificial intelligence. It’s a brilliant report. But it’s missing why all of these changes matter for marketers and e-commerce/customer acquisition leaders.

That’s where this episode of the podcast comes in.

Tim asks:

  • What are the big trends in the Mary Meeker AI report? And how will they affect marketing and customer acquisition?
  • What should you be doing right now to prepare for a world where AI agents make purchases on your behalf?
  • Which companies are likely to win in the future… and who’s likely going to fall by the wayside?
  • Most importantly, how can you be sure to succeed no matter how often and how much your customers use AI?

Want to learn more? Here are the show notes for you.

AI Is Eating the World, But Who’s Paying for Dinner? (Thinks Out Loud 464) — Headlines and Show Notes

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Running time: 19m 52s

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Transcript: AI Is Eating the World, But Who’s Paying for Dinner?

You know, unless you’ve been living under a rock for the last, I don’t know, two or three or four years, you’re probably aware that AI is moving faster than anything we’ve ever seen before.

But underneath the hype, there’s a problem nobody’s talking about. Who’s going to pay for all of this? Like, where does the money come from? And most importantly, what happens to marketers when the bill comes due? That’s a really critical lesson that I think we need to think about as we go forward as marketing and customer acquisition folks.

This is episode 464 of The Big Show. Today we’re talking about how AI is eating the world, but who’s paying for dinner?

Let’s dive in.

So I’ve been reading the Mary Meeker report for the last 24 hours or so. Longtime listeners of the show and readers of the blog know how much I love Mary Meeker’s report. If you’re not familiar with Mary Meeker, she’s a venture capitalist. She’s been around for a long time. She was an early investor in Facebook. Super, super smart woman. Tremendously, tremendously smart team she’s put around herself. And I devour her report every single time it comes out.

It is a massive report this year. 340 pages almost entirely focused on artificial intelligence and what it means for the world today. Now, you know that this show literally started out as a place for me to think out loud. That’s where the title came from. This episode is going to be a little bit along those lines, in part because I’m going to be digesting this report for a couple of weeks. Again, this is a 340 page report. There’s a lot in there, some of which are not so relevant to marketers and e-commerce professionals, and some of which are very relevant.

But…

I want to talk about her key finding as it matters to you today, which is that AI adoption has outpaced the internet, mobile, and even cloud adoption curves. ChatGPT hit 800 million weekly users in just 17 months. That is faster than any technology we’ve ever seen.

So AI is not some future thing. You know that. It’s here. It’s now. It’s beginning to become baked into the customer journey.

What’s also true is that those numbers require some clarification. First, adoption is not constant by age group. Sam Altman, who is OpenAI’s co-founder and CEO, said this, he said,

“a gross simplification is older people use ChatGPT as like a Google replacement. People in their 20s and 30s, use it like a life advisor.”

That’s a big difference. That’s a huge deal in terms of how customers use these tools.

The second key thing that you want to take away is that adoption might not be as broad as you might think. People who listen to the show, people who I interact with on social media and the like, we’re all fairly early adopters. So I think we think people have really taken this too hard. And it’s not that they haven’t. Again, adoption has been huge.

But today they’re spending maybe 18 minutes per day on ChatGPT by “USA active users.” Now that’s up from roughly seven minutes per day in less than two years.

Side note, the Meeker report doesn’t show exact numbers, just ranges in 10 minute increments. The current number is definitely a bit below 20 minutes per day, but it’s getting close to there. And the earlier number was definitely more than five minutes per day, but far fewer than 10. So, you know, seven. Also, “active users” isn’t clearly defined in the report, so we’re not 100% sure how they mean or what they mean by active users.

Another chart in the report shows that the average session duration is a little over two minutes and that the average user has about seven to eight sessions per day, roughly double what it was less than two years ago. So again, tremendous growth. These are impressive numbers. My favorite stat that they show is that the Meeker report shows that searches for the term “AI agent” have grown almost 1,100% since January of 2024. So in less than 18 months, it’s grown almost 1,100%. That is genuinely remarkable. What is also true is that

A.) It looks like those searches may have plateaued as of maybe February this year.
And B.) Its peak number of 500,000 searches per week is roughly one-tenth of 1% of the over 96 billion searches Google gets every week.

Don’t get me wrong, one-tenth of 1% of 96 billion is still a pretty good-sized number. It’s also not everybody is searching for AI agents all the time. That’s a big deal. Also note, they’re searching on Google, right? Keep that in mind. We’re going to come back to it.

With no disrespect to Mary Meeker, far from it, I think she is brilliant. Part of her job is selling the world on the things she and her company have invested in, right? More than a few of her company’s investments are AI companies. So, you know, you can forgive her if she was to give you a glass half full look at the world. And again, I don’t think she’s wrong that this is a big deal. Because by any measure, AI adoption is already big and it’s getting bigger.

What it hasn’t yet done is taken over for Big Tech companies. And there’s a reason for that. And the reason is that the costs of AI are starting to show.

There’s a telling quote in the presentation from Microsoft’s vice chair and president, Brad Smith. He said,

“like electricity and other general purpose technologies in the past, AI and cloud data centers represent the next stage of industrialization.”

In other words, data centers, the cloud, and AI are just a cost of doing business, kind of like the internet was once upon a time. Meeker herself writes, “The world’s biggest tech companies,” — which quick aside, she calls “hyperscalers” and the rest of us call “Big Tech.” Anyway, she continues by saying that “…the world’s biggest tech companies are spending tens of billions of dollars annually, not just to gather data, but to learn from it, reason with it, and monetize it in real time.”

“It’s still about data,” she continues, “but now the advantage goes to those who can trade on it faster, personalize it deepest, and deploy it widest.” I might add, again, to those who can monetize it.

What I find really interesting is that according to her research, Big Tech has increased their capital and R&D spending roughly 20-plus percent per year for the last 10 years or so. But they’ve seen their cloud computing revenues increase roughly 37% per year during the same period. And I’m gonna come back to this in a moment.

There’s this paradox she points out called Jevons Paradox. They note it was first proposed back in 1865. Jevon was an economist.

Anyway, it states that, “the technological advancements that improve resource efficiency actually lead to increased overall usage of those resources.” So in short, “costs fall, performance rises and usage grows all in tandem.” So as your costs fall, usage grows, which raises your costs.

They conclude by stating “this trend is repeating itself with AI.”

By the way, the people doing this a lot, are folks like OpenAI and Big Tech.

If you look at OpenAI’s various actions over the last bunch of months, they’ve been super busy:

  • OpenAI apparently wants to buy Chrome if Google is forced to sell it as part of its antitrust case.
  • OpenAI launched a commercial search engine, a consumer-facing search engine.
  • They said they’re thinking of launching a social network.
  • They bought Jony Ives’ company to design products. They paid billions of dollars to buy that company.

Now these all could signal bold ambitions for OpenAI becoming the next Big Tech player, connecting customers across a variety of applications and platforms.

I think it also kind of signals their current reality, which is that they don’t have any way of recouping the billions of dollars they’ve already spent in developing their products. According to reports, they generated $3.7 billion in revenue in 2024 and lost $5 billion. That’s a neat trick. They’re on track for apparently $9.2 billion in annualized revenue in 2025… against the $64 billion they’ve already raised in funding. And that’s before you consider the fact that open source is coming.

This feels a little to me like the dot-com bubble where some companies invested in “the internet,” but not in things that they could actually make money; for products for customers and in the products and services that they offered. You know, when you think about OpenAI, they’re kind of selling “the internet…” but not the things on top of the internet that actually make money.

And I think there’s an implication for all of us in marketing and customer acquisition, which is if you’re building your marketing workflows or you’re building your go-to-market strategy solely around ChatGPT or GPT APIs, you may be betting on a shaky foundation. I’ll admit, I’ve kind of come 180º on this. I originally thought they were the biggest threat to Big Tech, and they may still be. They may find a way to turn this into a lot of revenue really quick.

But if you contrast what OpenAI is doing with Google or Microsoft or Amazon or Apple, our old friends in Big Tech, they’re using AI to enhance existing high margin businesses like ads or cloud computing or hardware. They have integrated monetization paths. They don’t have to make AI pay for itself directly. They own the ecosystem. They own the platforms. And they own the distribution of how they put this in front of customers.

For example, we think about Microsoft Copilot and its deep integration with Microsoft Office. I know they call it 365, but come on, it’s Office. And Azure, their cloud computing platform.

Amazon is using AI to empower how quickly it gets orders to you, how it improves its ads, and how it improves its shopping user experience. Again, growing the business they already make a lot of money off of.

Google’s AI overviews and AI mode enhance the search monetization as well as, again, their cloud computing platform.

And Apple’s on-device AI could reinforce their dominance in selling hardware where they make a boatload of money.

The key differentiator is that Big Tech is integrating AI into already highly profitable and diversified businesses with huge user bases and a ton of different monetization options. AI is enhancing these existing revenue and profit engines rather than being the sole engine for revenue generation that OpenAI has got.

And again, I think that’s got a broad implication for those of us in marketing and e-commerce and customer acquisition because the smart money isn’t just on cool AI, it’s on embedding AI into some sort of scalable profitable ecosystem. We have to think about how are we using these tools in a way that benefits our customers and our businesses.

So I think we need to really think about how we’re putting AI to work for real. And I’ve got five quick recommendations.

  • The first is we’ve got to treat AI like infrastructure. It’s table stakes. It’s not just some fly-by-night thing. Much like the internet, we need to plan long term about how it shapes our businesses and how we want to build on top of this.
  • The second is, I wouldn’t over commit to a single vendor. If you’re all in on any one of these guys right now, that may not work out in your favor. You’ve got to build some flexibility into your martech stack and into how you’re using these technologies to connect with your customers.
  • The third is these folks all have to figure out how to make more money from these massive investments they’re making. So prepare for some pricing volatility. You you need to budget accordingly that the cost could go up even as the cost per transaction goes down.
  • A big one is, of course, double down on your own proprietary data. You know that I say “data is the crown jewels.” It is absolutely true. It remains your competitive edge. Just like you don’t really care about the internet, you care about what you do on top of it. You kind of don’t care about AI. You care about how it makes your data more beneficial to your business.
  • And then the last thing is keep an eye on how the market is shifting in AI. These platforms and the ecosystems they operate in are going to shift around a bunch in the coming days and in the coming months and in the coming years. You want to be prepared to succeed no matter what happens.

Now all of this said, I do want to say we are clearly in a period of breathtaking innovation. I mean, we have seen so much change in the way AI is shaping the way that our customers interact with our businesses and that in the way that our businesses respond.

But it creates a certain degree of uncertainty. So we need to keep learning and we need to remain flexible.

If I could leave you with one last thought though, is OpenAI may have built the rocket, they may have built the vehicle, but the companies who are gonna make money on this are the ones that are selling tickets, who are connecting with customers, and who own the fuel supply.

You need to think beyond the rocket. You need to think beyond the tool. You need to think about the system you’re building because the marketers who will win in this next era aren’t just using AI. They’re thinking about how it shapes their business — and structuring their business around how it helps their customers.

The future of marketing and e-commerce won’t just be about using AI, but about intelligently investing in the right tools and using those solutions that are built to support sustainable business models. I think it’s really critical we make sure we distinguish between the two. And if you do a good job of that, you’ll succeed no matter what happens to any of the players.

I can’t wait to see what you do.

Show Wrap-Up and Credits

Now looking at the clock on the wall, we are out of time for this week. I’m willing to bet that you might know someone who would benefit from what we’ve talked about today. Are you thinking of someone? Why not send them a link to the episode? Be sure to let them know what you think too. Keep the conversation going.

You can also find the show notes for this episode, episode 464, as well as an archive of all of our past episodes by going to timpeter.com/podcast. Again, that’s timpeter.com/podcast.

And of course, be sure to like and subscribe wherever you get your favorite podcasts.

By the way, if you’re looking for something new to read, something cool to read, the talks about Big Tech and how you can build your business beyond Big Tech, I’d love to suggest the number one new e-commerce book on Amazon.com Digital Reset, Driving Marketing and Customer Acquisition Beyond Big Tech and written by me. Please pick up a copy and let me know what you think. I would genuinely appreciate it.

Now before I go, I just want to say thanks so much for listening. This show would not happen without you. I’ll be back next week with a new episode and I can’t wait to talk about all the other cool stuff that’s going on in the world.

Until then, please be well, be safe, and as the saying goes, be excellent to each other. We’ll see you soon.

Tim Peter is the founder and president of Tim Peter & Associates. You can learn more about our company's strategy and digital marketing consulting services here or about Tim here.

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