Tom Tunguz on the ad model for prompts

Tom Tunguz has a post up arguing that the real economic model for AI prompts is going to be advertising, and the companies that win will be the ones vertically integrating the ad stack — the way Google and Meta did with search and social.

The setup is straightforward: prompts are the new entry point. People type into a box, the model answers, and the interaction is short enough that there's room for ads. The question isn't whether ads show up in AI — it's who controls the supply. Tunguz says the winner is the company that owns the prompt + the ad network in one shot, instead of some third party trying to bolt ads onto a chat interface after the fact.

The post is a long read and the argument tracks, but it's mostly a rehash of the same thesis that's been circulating for months: search is dying, prompts are the new search, and ads follow the attention. The interesting part is the vertical-integration angle — the idea that the prompt layer and the monetization layer can't be separated without losing the whole business.

It's a solid piece for people already thinking about this. The rest of us can read the summary and move on.

Why this matters for us: the companies that own the prompt and the ads together are the same ones that will decide what the rest of us see when we ask AI to write things — and that's a lot of power in the hands of a few big tech players.