Before the Y2K bubble popped around 26 years ago, Pets.com was the American dot-com enterprise that marked the peak. The firm spent its funds on a Super Bowl ad. This past weekend, Anthropic, an AI chatbot supplier, spent millions of dollars on an advertorial.
Anthropic’s ad is an attack against one of the top two AI leaders in the market: OpenAI.
Alphabet (GOOG) offers Gemini, whose AI ranks second among providers and could be in first place by the end of this year.
The frenzied AI ad spending is a red flag that potentially signals a pop in the bubble. However, after Amazon (AMZN) said it would spend $200 billion on AI hardware, a pop is unlikely. Microsoft (MSFT) is also spending a comparable amount on AI and OpenAI, worth $650-$700 billion in 2026. Unfortunately, MSFT stock fell because investors are worried. 40% of Microsoft’s bookings are connected to OpenAI.
Anthropic’s ad has the punchline that “Ads are coming to AI. But not to Claude.” The firm is attacking ChatGPT for introducing ads on the platform.
Issues
Bleeding billions in losses per quarter, ChatGPT needs revenue. Advertising is one quick solution for revenue. However, not only does it target users who have minimal disposable income, but it might create a bias in AI responses. That creates distrust for ChatGPT, alienating paid customers from renewing their subscription.
