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There are so many aspects of AI and the AI story still to be written. And to that end, we're going to spend time uh
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every month on our first podcast of the month talking about various aspects of the AI technology and its connection to
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us. Our guest will be Stephano Pantoni, marketing professor here at the Wharton School and also co-director of the
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Wharton Human AI research program. Stephano, great to talk to you. How are you today, sir?
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>> I'm great. Great to be here. excited about this new segment. >> Thank you, sir. Yeah, it's this is
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obviously so important uh in terms of uh what we're seeing going on in our lives.
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A couple of areas that we wanted to focus on today. First, how AI and platforms will be adjusting to the needs
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of the consumer. And one of the things I know you're focused on is the potential
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of monetization of AI platforms. give us a little uh explanation as to what we might be looking forward to
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>> in a segment like this one. Trying to dissect uh the news and what they mean
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uh in this field of AI is tricky because there are so many there's so many things
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happening all the time. But uh to you know pick a couple of things that might be interesting to our audience. one that
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uh I think has come to the four uh increasingly in the coming uh weeks and months has been this conversation about
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uh the monetization of chat bots. And if you look at all large AI uh labs, they have basically pursued so far what you
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could call a premium strategy where people can sign up and make an account for Chach PT or you know Gemini or
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Antropica or whatever. And you can do that for free basically with minimal hurdles. Just leave your email account
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you confirm the email and you're in business. And then paired with that you have a premium subscriber strategy where
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you would have say for example Chach Plus which would set you off about 20 bucks a month or GP Chach PT Pro which
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is uh the more expensive one which is I believe somewhere around a couple hundred a month and so so far the AI
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labs have been able to attract very vast audiences. If you look at the subscriber
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base for chacht is enormous but a very tiny percentage of the people using chacht are paying for it. And uh while
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for the eyabs uh that large user base is crucial in improving the models as you get increasing amount of feedback from
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users you can make those models better. But at the same time uh pressure will mount on AI companies to uh uh create
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revenues. Up to now has been uh uh you know enormous amount of private capital uh entering the space. So these
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companies have been very well funded without having to worry too much about uh revenues. But that may change over
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time as uh the industry matures and maybe some of the froth um kind of like starts to fade. And so basically
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companies will have to think about these free products that they're offering. How
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am I going to we're going to make some money out of that? >> But will it be necessary for companies
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to have both versions of that concept of having a free model and a paid model as
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we move forward? And and how should the consumer think about the fact that here's another kind of technology that
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is being monetized and and really forcing them to pay for its use? In many cases
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>> many many people believe that uh most of the money in the uh AI space is going to
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be made out of enterprise solution more than consumer solution. So one pathway for AI companies would be that of
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focusing on the enterprise market. So you could imagine OpenAI investing much more on the uh let's say building a um
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you know B2B organization selling solutions to corporates and kind of uh um play down or even wind down the
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consumer part if that turn out to not generate the kind of revenues that they need. Companies like Microsoft which is
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very much focused on the corporate market will be focused there. But many also make the argument and I've heard
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that argument made by people at AI labs too that the consumer market is important because it creates a sight
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guest and the interest in the technology that broadly people in society are aware
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and excited about. That's important for a variety of reasons including regulation, investor relations and all
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that. But also maybe more importantly by having millions and millions of people interacting with the system companies
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can uh use the data that they gather through those interactions to make the systems better. So a company like OpenAI
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probably should be expected to pursue a hybrid strategy where they do pursue the
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B2B market but they also keep uh pursuing the B2C market. But the question is how do I make money out of
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the B2C market? And typically what has happened with digital products over the last two three decades that has meant
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advertising. >> One of the other areas I know you're focused on is that of energy supply and
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that is an area uh which obviously is drawing a lot of attention right now because of the expected buildout that
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we're going to have to see in order to have enough energy. But there is a component of that that obviously will
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play to the consumer as well. >> Yeah. So we'll uh let's uh let me final
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make a final point about the monetization part and then I I'll come to this energy thing because there's
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been a recent newspaper that is quite interesting in that space. Now if uh companies will be under pressure to uh
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raise revenue through advertising then that means that uh we will be seeing the arrival of sponsored bots. Basically,
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this would be bots that would be paid by advertisers to promote particular brands. And you can do that in a variety
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of ways, but we'll see moves in that direction. A couple of weeks ago, Elon Musk, for example, announced that Grock
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will be uh selling advertising services. has been s sort of kind of weak we vague
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into how they exactly going to do that but quoting from the financial times said if a user is typing to solve a
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problem by asking rock then advertising the specific solution would be ideal at that point in time so you see
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potentially a value of a chatbot as an interface for advertisers to reach audiences the interesting spin on that
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would be from the point of the consumer h do I trust a bot if I know that the answers might be sponsored and how do we
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navigate that trust issue as an AI lab and potentially also regulators might be concerned about disclosure and
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deception. And so I think this idea of advertising as a revenue engine for the free product of chatbots and AI
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companies I think brings up a lot of really interesting and complicated questions around consumer welfare trust
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in AI companies and regulation. Now moving to uh the uh energy question you were asking. Um just about a week ago um
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researchers at Google put out a new paper where they uh reported a very uh detailed in-depth analysis of the carbon
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footprint of uh their Gemini chatbot. And there is also a quite stunning in that uh uh we've seen a tremendous
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improvement in the efficiency of these models. And so within a 12 months period from May 24 to May 25, Google documented
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a uh uh 44 fold decrease in car footprint for for Aquery on Gemini and that is enormous within a one one short
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year. So climate concerns are real when it comes to AI. We're building gigantic
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data centers that are going to suck an enormous amount of energy. But those are more uh function of increasing huges of
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AI than AI being very power hungry. In fact, uh Aquarium on Gemini now already today is equivalent to watching TV for 9
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minutes sorry 9 seconds and about uh five drops water consumption. So we we're talking about fast shrinking
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carbon footprints which like I said you know if you grow a,000% a year even if you're becoming more efficient you're
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still using a lot more energy but I think for the future we are at least seeing great improvements in a way there
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are two races in AI there's a race at the top to build the biggest most performing models and that's what the
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race that takes all the attention but there's another race going on a little
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bit under the radar which is that to create the most efficient cheapest model that enable you to have the same outcome
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comes with a lower carbon footprint. >> Stephano, great to talk to you as always. Thanks very much for your time
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today. All the best. >> Thank you, Dan. >> You got it. Stephano Pantoni, who is a
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marketing professor here at the Wharton School and also co-director of the Wharton Human AI research program.