I have a background in technology and business forecasting (formerly trained at a large industry analyst firm, and I co-founded a boutique industry analyst firm in silicon valley) and use these skills to think about how business models will change with the introduction of new AI technologies.
The emerging technology category is AI Agents: autonomous applications that can self-task, complete tasks, recruit other agents, and self-improve. I’ve mapped the AI agent market, and hosted the largest agent event in the world, Llama Lounge 8 to understand the monumental change that is coming.
My thesis how AI agents will significantly change the structure of the internet
- AI Agents will perform the tasks on the internet that we don’t like doing: gathering information, filling out forms, completing tasks, and bringing the information back to us in a centralized user experience.
- The AI agents will bring back the information will reassemble in the way we want: a multi-modal experience—text, voice, images, VR, AR, whatever suits us the users.
Let’s Break Down the Logic Chain of What Happens Next:
This means that AI agents could bring back key information, and you could instruct them not to include advertisements. AI agents could parse the information on websites, prioritize what’s useful or essential, and filter out extraneous information like advertisements. Think of it as an intelligent ad blocker.
Of course, this depends on the business model—who the AI agent serves, which has always been the case on the internet. I think we’ll see three types of AI agents for humans:
- Premium AI agent biz model: You pay for this agent, and it serves you. Your private information stays private, and it filters out any ads that don’t serve you.
- Freemium AI agent biz model: This agent serves a large corporation or other entity. For example, Amazon might offer a free AI agent to do your tasks, but every transaction would reroute through their shopping ecosystem.
- Hybrid AI agent biz model: This agent is free to use and as a default offers advertisements; but as you conduct actions such as expose your private information or perform referrals the irrelevant ads dissipate and become more targeted offers.
What Percent Will Pay for a Premium AI Agent? My estimate is 20-30% of the world would pay for a premium agent (category 1). The iOS market represents about 20% globally, plus high-end Android users. While this isn’t the mass market, it likely represents the highest spending ability and high net worth that corporate marketers and advertisers often drool over. Pricing models tbd.
Advertisers Shift to Offerings. As a result, advertisers need to make a significant shift. Instead of offering traditional advertisements (text, image, rich media), they will instead provide offers—discounts, premium products, access to loyalty programs. Consumers might instruct their AI agents to research and procure products within a certain price range, seeking bargains, and advertisers will need to broker those parameters to meet consumer requests. Advertising shifts to become more of a marketplace offering.
Online Marketers Shift to Online Experiences. As AI agents become the primary visitors to websites, marketers will need to make these sites more attractive to human visitors. I still imagine that humans will seek online experiences in categories like media, entertainment, sports, news, luxury experiences, and unique immersive content—the fun stuff you hide from your boss when they walk by your desk.
How Big Tech Media and Commerce Companies Will Shift. I’ve already given the example that Amazon will offer a free AI agent (which funnels users into their shopping ecosystem). We should also expect Google to offer an AI agent that excels at online research, with both an ad-supported free version and a premium, ad-free version. Apple will likely offer an AI agent that emphasizes privacy, integrated within their ecosystem—of course, at a premium cost with their latest devices . These big companies move slowly, which leads to the next point.
Best-in-Class: AI Agent Startups. Startups are likely going to redefine this next generation of the internet. We’ve seen it with every tech wave (dot-com, Web 2.0, sharing economy, mobile). A new class of startups will emerge and redefine human behavior and commerce. My conviction—which you may see as biased—is clear, as I’m investing in numerous AI agent companies that focus on consumer agent experiences, enterprise AI platforms, agent payment systems, and identity/security. More on that soon.
So, In Summary: Do AI Agents Kill Advertisements?
To remind: AI agents will surf the internet for us, conduct tasks, and bring the relevant information back to us —in the format that we want (not what advertisers and marketers want):
- Yes: The majority of advertisements will be less relevant as premium AI agents strip away unwanted content.
- Yes: To reach premium AI agent users, ads will morph into useful offers, which needn’t be pay for ads, or could be an APi from the seller directly
- No: For those unable to pay for a premium AI agent, advertisements will be embedded into the AI agent experience.
- Yes: Marketers will change their approach, creating more attractive web experiences beyond simple product offerings.
I’m actively writing checks into AI Agents startups from Blitzscaling Ventures where I’m a VC, if you’re working in this space, write back.
