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Advertising in generative AI systems has become a fault line. Last month, OpenAI released that it would start running ads in ChatGPT. Speaking at the World Economic Forum in Davos, OpenAIs chief financial officer defended the introduction of ads inside ChatGPT, arguing that it is a way to democratize access to artificial intelligence, and that this decision is aligned with its mission: AGI for the benefit of humanity, not for the benefit of humanity who can pay.” Within days, Anthropic fired back in a Super Bowl commercial, ridiculing the idea that ads belong inside systems people trust for advice, therapy, and decision-making. In some way, this is a spat about how each company is marketing itself. In another way, this debate echoes the debates about the early internet, but with far higher stakes. The big question The underlying question is not whether advertising generates revenue. It clearly does. But rather: is advertising the only viable way to fund AI at scale. And whether, if adopted, it will quietly dictate what these systems optimize for. History offers a cautionary answer. The last several decades of online advertising has proven that when profit is decoupled from user value, incentives drift toward harvesting data and maximizing engagementthe variables that can be most easily measured and monetized. That trade-off shaped everything in the internet economy. As advertising scaled, so did the incentives it created. Attention became a scarce resource. Personal information became currency. What Google taught us Googles founders themselves acknowledged this risk at the dawn of the modern web. In their 1998 Stanford paper, Sergey Brin and Larry Page warned that ad-funded search engines create inherent conflicts of interest, writing that such systems are biased towards the advertisers and away from the needs of the consumers, and that advertising incentives can encourage lower-quality results. Despite this warning, the system optimized for what could be measured, targeted, and monetized at the expense of privacy, transparency, and long-term trust. These outcomes were not inevitable. They flowed from early design choices about how advertising worked, data moved, and influence was disclosed. A pivotal moment Artificial intelligence now finds itself at a similar pivotal moment, but under far greater economic pressure and with far higher stakes. It is worth noting, artificial intelligence is not cheap to run. OpenAI projected that it will burn through $115 billion by 2029. Like internet users, AI users are unwilling to pay for access, and advertising has historically allowed the internet, and businesses depending on it, to scale beyond paying users. If advertising is going to fund AI, personal data cannot be the fuel that powers it. If conversations on an AI platform leak into targeting data, users will stop trusting it and will start viewing it as a surveillance tool. Furthermore, once personal data becomes currency, the system inevitably optimizes for extraction. That does not mean future advertisers on these AI platforms would have to operate in the dark. Brands will still need to know that their spending delivers results, and that their messages target users aligned with their values. Its justifiable that brands need outcome measurement and contextual assurance. The real problem The irony in Anthropics critique is instructive. A Super Bowl commercial is itself a testament to advertisings enduring power as a form of communication and cultural signaling. Advertising is not the problem. Invisible incentives are. The way to satisfy both consumer trust and business growth is to build the advertising ecosystem on open, inspectable systems so that influence can be seen, measured, and governed without requiring the collection or exploitation of personal data. Standards such as the Ad Context Protocol sets out to do exactly this. This is the window in which profit can still be aligned with value. At stake is the difference between advertising as manipulation and advertising as sustainable and enduring market infrastructure. The ad-funded internet failed users not because it was free, but because its incentives were invisible. AI has the chance to do better. The choice is ours to make.
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E-Commerce
Public transit could be on the verge of getting a whole lot more efficient. The Bay Area city of San Jose says it has improved public transportation by implementing an AI transit signal priority (TSP) system that makes its bus routes 20% faster and shortens ride times for passengers. An urban planning win, it also broadens the strategies available to other cities looking to improve their public transport. TSP systems are programs that make traffic lights responsive and adaptable to public transportation in real time. They can extend a green light to give buses an extra second to make it through an intersection or shorten a red light so they don’t have to wait as long. It’s similar to the higher-urgency emergency vehicle preemption (EVP) system for first responders. While EVP systems for ambulances, fire engines, and police cars can immediately change signals, TSP systems for buses or trains can only nudge them. The extra moments from those lower-priority nudges, though, can still make a meaningful difference in keeping buses operating on schedule. “By helping buses move more efficiently through intersections, the technology reduces delays, improves on-time performance, and shortens wait times for riders,” a statement from the city read. Cities have found other ways to reduce wait times for riders. AI lane enforcement that tickets vehicles driving in or blocking the bus lane cuts the number of illegally parked cars in a hurry. In London, buses have switched to contactless boarding, which led to improved boarding times. A passenger boards a Santa Clara Valley Transportation Authority bus. [Photo: VTA] San Jose becomes one of several test cities San Joses TSP was developed by Lyt, a Northern California transit software company. Its software interacts with a transit agency’s traffic manager center via a computer called Maestro. Lyt’s system was piloted in San Jose beginning on just two Santa Clara Valley Transportation Authority (VTA) bus routes in 2023; now it’s used for 24 routes. Federal and state funds paid for a majority of the project. Lyt provided TSP software for buses in Portland, Oregon, in 2022 that reduced delays by 69%. Last September the company announced it would pilot its tech on four bus routes in Baltimore. Lyt did not respond to a request for comment. Lyt’s TSP technology uses criteria like routing information, traffic conditions, and vehicle location to predictively keep buses running on time. The company pitches its system as better and more cost effective than the analog prioritization method of dash-mounted strobes on buses that beam infrared or optical lights to traffic pole equipment. “Our cloud-based transit priority system takes the global picture of a route into account and uses machine learning to predict the optimal time to grant the green light to transit vehicles at just the right time,” Lyt founder and CEO Tim Menard said in a statement about the system when it expanded across more San Jose routes in 2023. Public transit garners new public interest City bus speeds have grown from being strictly transportation and infrastructure issues to something that resonates more broadly after New York City Mayor Zohran Mamdani won last year’s election in part on a campaign promise to make city buses faster and free to ride. Its a promise Mamdani’s office says he intends to keep, even after the federal Department of Transportation developed a proposal to stop its transit funding for any city that provides free bus service, according to Politicowhich represents a direct threat to the Mayors ambitious plans. Nevertheless, smarter systems that give buses a few extra seconds to make it through an intersection could be the edge that makes public transportation in cities across the country faster and more reliable.
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E-Commerce
When Minnesota Timberwolves star Anthony Edwards steps onto the NBA All-Star court in Los Angeles with the leagues best players, there will be cameras following his every move. But it wont just be NBC clocking the action. Edwardss own Three-Fifths Media will be there for his ongoing unscripted show, Year Six. Its the second season chronicling the daily grind of his NBA exploits, building on last years Year Five. Three-Fifths Media started in 2019, with Justin Holland, Edwardss business partner and manager. They signed a production deal with Wheelhouse in 2024 to collaborate on projects like Year Six. So far, Three-Fifths has produced Serious Business, an unscripted show on Prime Video that challenges celebrities and athletes in their own domains, Year Five, and now Year Six, and the inaugural Believe That Awards, which aired in October on YouTube and had 167 million views across platforms in its first 48 hours. On the side, Edwards also produced a hip-hop album featuring heavyweights Pusha T, Quavo, and Wale. The 24-year-old Edwards is methodically building his own content and entertainment business clearly influenced by the success some of his on-court heroes have had over the past decade, like Kevin Durant with Boardroom and LeBron James with Fulwell Entertainment (formerly the SpringHill Co.). Of course, there is no guaranteed blueprintwitness SpringHill’s financial struggles, despite strong productions, that led to its merger with Fulwell last year. The two common threads among Three-Fifths Medias projects is that they shine a spotlight on a real and (largely) unfiltered Anthony Edwards, and are at least partly owned by the NBA star. Holland says thats not only at the core of their content, but the overall business strategy. We’ve leaned into being authentic in every room we walk into, and prioritize ownership over exposure, says Holland, who has been working with Edwards since 2016. Not just looking for deals because of dollar amounts or because they’re cute, but also really leaning into brands that we really can take ownership in, allow us to keep that authenticity, and also look for opportunities where we can actually own our IP. Just like Edwardss on-court career, its been an impressive start, and shows potential to help redefine athlete-owned media. Believe That Okay, picture this: A remake of the 2001 film Training Day, starring Timothée Chalamet as Ethan Hawkes character opposite NBA star Anthony Edwards in Denzel Washingtons spot. It sounds crazy, obviously, but Chalamet and Edwards actually talked about it in October when Edwards awarded the actor his White Boy of the Year honor as part of the satirical Believe That Awards show. View this post on Instagram The show didnt feature a red carpet, nor was it drenched in celebritythough Chalamet and Candace Parker made Zoom appearances. It was shot in Edwardss actual basement, and had the feel of a Saturday night hang-out with him and his friends. That ability to seamlessly jump from highly produced work like Year Five, to more street-level, vlogger-style content is perhaps Edwardss biggest media strength. You have guys that impact culture, and then you have guys that create, says Holland. Ant’s one of those guys that creates culture. So everything that we do, we’re intentional about not trying to follow the standard, and aim to actually be innovative in our creative process. Theres a reason the vibe of hanging with Edwards and his friends permeates so much of his work (his best friend, Nick Maddox, stars in many of his Adidas spots) its because thats whats really happening. It is actually pretty easy when you have a guy like Anthony and our crew, says Holland. We keep everything really tailored to our core group and just want to make sure that we continue to build from there. Brand consistent Holland says that, as a young up-and-coming NBA star, early in his career brands would try to fit him into their box or version of him they wanted. The work they’ve done with partners like Adidas, Sprite, Bose, and Prada represent those that have not only steered away from the old hold-the-product-and-smile approach, but encouraged Edwards to take ownership of the creative. Most modern athletes will talk about authentic connection with both brands and fans, but tend to serve up only the most curated and choreographed version of it. What makes Edwards work most unique is how it makes fans feel a part of that inner circle, whether in a social post or a big time sneaker ad. We try to stay away from just brand endorsements and we really like to be in business with people that really understand who we are and then actually want to collaborate with us, says Holland. That translates to having Maddox starring in Adidas ads, or Edwardss brothers music featured in a Bose campaign. It also brings Edwardss natural affinity for trash talk to his brand work. Brands typically shy away from controversy, but Adidas has embraced Edwardss approach wholeheartedly. They turned heads last year, launching his first signature shoe with ads that called out other pro shoe models and social media trolls by name. In a spot called Top Dog for his AE2 shoe, he beats video game caricatures of his biggest rivalsLuka Dončić, Victor Wembanyama, and Shai Gilgeous-Alexander, among others. Holland says getting brand partners to embrace Edwardss authentic self was tougher at first, but the results speak for themselves. We talk to our partners about our overall picture, looking at it from a wide lens of how we want to operate, he says. Now those conversations are a lot easier. They see how we move and how the public actually reacts to the authenticity, and how it resonates, because it just makes all the work that much more relatable.
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E-Commerce
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