Generative AI is quickly becoming a critical new interaction layer of the internet – the interface through which people search, shop, consume, and create.
Across nearly every measure of behavior, adoption continues to surge. Weekly visitors to ChatGPT.com now total roughly 800 million, while average time spent per user exceeds 90 minutes per week. Meanwhile, Google reports that the total number of AI tokens processed – the basic text units models use to process and generate language – doubled between late May and July and grew another 33% from July to September, underscoring how rapidly consumers are integrating AI into daily digital life.
The pattern is familiar. Every major platform shift in internet history – from the Dotcom boom of the 1990s to the mobile revolution a decade later – has redefined how consumers engage online, unlocked new categories of business, and unleashed multi-year surges in digital advertising. The question now is whether AI will follow the same trajectory, and if so, how it will reshape the economics of the web.
A Familiar Cycle of Returns
Technology cycles tend to unfold in recognizable phases: they begin with heavy venture investment, find product-market fit, and reach escape velocity when capital floods into customer acquisition.
The Dotcom era, for instance, produced entirely new categories in retail, travel, and media, driving global ad spend growth of roughly 9% annually for seven consecutive years, sharply above the 4% trend before and after this period. The mobile wave repeated the pattern. As U.S. smartphone penetration rose from 45 percent to 77 percent between 2012 and 2017, U.S. digital advertising growth re-accelerated from 15 percent to 22 percent.
AI appears to be entering a similar phase. In-app software spending, a proxy for advertising tied to AI-native products, grew more than 50% year-over-year in the second quarter as AI-native companies ramp up user acquisition.
Recent examples suggest this dynamic is already playing out. Social media platform Snapchat recently signed a distribution deal with AI search platform Perplexity that is expected to add seven percentage points to its revenue growth rate in 2026 – a direct illustration of how new entrants are spending aggressively on customer acquisition to capture share in a fast-shifting market.
And unlike the last era, AI is transforming the creative process itself. As Mark Zuckerberg put it: “We’re going to get to a point where you tell us your objective, connect your bank account, and you don’t need creative, targeting, or measurement – just results.” Sam Altman echoed that sentiment when he predicted that AI would perform 95 percent of all marketing tasks by 2030.
The implications are profound. As automation compresses the marketing stack and lowers creative costs, budget surpluses will likely flow directly into paid media. These gains could add tens of billions in annual ad spend over the next few years, creating a durable tailwind for the sector.
Even content itself is becoming more automated. AI-generated text, video, and imagery are fueling new engagement streams across social platforms and new entertainment platforms altogether. On Instagram, global video time is up more than 20 percent year over year, underscoring how richer formats are capturing user attention and driving new opportunities for advertisers.
From Search to Conversation
A broader behavioral shift is also underway. Generative AI tools are increasingly becoming the starting point for everything from research to shopping to travel planning. Instead of visiting a search engine or app store, users are beginning journeys through a single conversational interface that answers questions, summarizes options, and increasingly will execute actions.
If user activity increasingly begins inside AI environments, traditional entry points such as search, social, and marketplaces could lose influence. Ultimately, how people find information and products may shift from keyword-based navigation to context-driven dialogue.
Take travel as an example. Consumers are already using AI for destination research, itinerary planning, and review aggregation, though they are not yet booking through AI directly. As a result, early adoption has been disruptive primarily for research-driven intermediaries rather than for the booking platforms themselves. While this gap could close as integrations expand, AI currently functions as a discovery engine rather than a replacement for existing search.
Meanwhile, platform capabilities are racing ahead. Google recently announced that users will soon be able to call stores, browse products, and check out using AI, effectively collapsing multiple steps of the customer journey into a single agentic workflow.
These shifts raise the question of which business models can survive or thrive if AI becomes the primary interface. For now, transactional and lead-based models appear most resilient. For example, companies that generate revenue from agent leads rather than ads – like real estate or service marketplaces – could transition smoothly to conversational interfaces, since their value is tied to outcomes, not page views.
The Opportunities and Risks on the Horizon
The next stage of the AI cycle will focus on agents – systems that move beyond assisting to acting autonomously. Emerging AI agents can already fill shopping carts, plan travel, and manage enterprise workflows end-to-end. However, if users delegate more of their activity to autonomous agents, advertising could shift from discovery to transaction, compressing the funnel and reducing ad inventory across the web.
There are also broader structural constraints. Running large models requires enormous investment in chips, power, and infrastructure, and data center projects are facing significant bottlenecks, delays, and opposition. Many AI startups remain unprofitable, with resources concentrated in infrastructure rather than marketing. That imbalance could temper the near-term surge in ad spending even as long-term demand builds.
Competition could also intensify as new players enter the market. If leading AI providers eventually open their platforms to advertising, it could re-route budgets and put pressure on incumbent online advertising platforms and the retail media category that has been exploding for eCommerce companies.
While the long-term outlook remains uncertain, the medium-term is likely a hybrid web – one where discovery begins in conversation, but execution still happens across a mix of native apps and third-party services. In this scenario, visibility and performance will hinge less on page rankings and more on a brand’s ability to integrate seamlessly into conversational ecosystems.
The next few years will test which models prove durable and which are left behind. What’s certain is that the brands that embrace AI not as a tool, but as an operating system for growth, will define the next era of the internet.