This blog post is a detour from my normal streamr bag pumping, but I couldn’t help but weigh in on OpenAI CEO Sam Altman’s casual dismissal of our entire industry.

I almost nixed the weird Grok-generated image for this post, but I do think it’s funny to think about Altman’s AGI daydreams being disrupted by a well-placed billboard ad. Let’s dive in.

OpenAI is currently treating advertising with disdain like Netflix did for over a decade.

Remember when Reed Hastings declared, “No advertising coming onto Netflix. Period”?

Fast-forward to 2022 when Hastings conceded, “I've been against the complexity of advertising...but as much as I'm a fan of simplicity, I'm a bigger fan of consumer choice.”

Translation: Netflix hit its subscriber ceiling and realized there’s serious money in ads.

Today, Netflix is going all out with their ad expansion initiatives, recently announcing the launch of the Netflix Ad Suite.

Why the change of tune? I think Netflix rightfully sees YouTube as its biggest rival in the streaming space. YouTube pulled in a staggering $36B in ad revenue in 2024 and $50B total including subscriptions. Netflix, meanwhile, generated $39B in revenue with $10.2B coming from ads. Netflix’s ad business grew 16% YoY in 2024, but advertising is a scale game, so catching up with YouTube’s network effects won’t be easy.

YouTube doesn’t just compete, it dominates, with over 2.7B monthly active users globally. Netflix had no choice but to launch an ad tier or risk YouTube running away with the Streaming Wars trophy.

Sam Altman currently dismisses ads the same way Hastings did. Speaking to Ben Thompson, Altman shrugged off advertising: “Currently, I am more excited to figure out how we can charge people a lot of money for a really great automated software engineer or other kind of agent than I am making some number of dimes with an advertising-based model…I kinda just don’t like ads that much.”

Dimes? A $1 Trillion industry is A LOT of dimes which is why the competitive AI landscape isn't waiting for OpenAI to change its mind.

Just last week, I attended Marketecture Live, where OpenAI rival Perplexity’s Head of Advertising talked about the beta ad campaigns they are running. They are definitely far away from figuring out exactly what ad format and experience will work best in a chat-based experience, but they are taking the most critical step: test early, test often.

Oh, yeah. OpenAI doesn't just compete against scrappy AI startups either. They're up against Google, a company with a monopoly on search advertising. Google has 90% of global search market share and generated $238B from ads in 2024. Yes, Google seems to be dropping the ball in some AI areas with its product rollouts. (Bye, bye Bard.) But we folks in the AdTech industry know all too well that Google can drop the ball a thousand times and still come out on top due to its unlimited resources and distribution.

This is why I think OpenAI should have started experimenting with an ad tier yesterday. As Netflix learned, OpenAI risks losing momentum if it waits too long to deploy ads.

AI is going to completely upend the $1 trillion advertising industry. If OpenAI is not a driver of that change, another company surely will be.