The Obsession of GenAI Tools with Content: It Is the Acquisition Engine
OpenAI and Google aren't building video generators to compete with Hollywood. They are building them because "Viral Content" is the cheapest Customer Acquisition Cost in history.
Why are AI companies pouring billions into un-monetized video tools? Because text is boring, and video is the only way to get a billion users to download the app.
Inspiration: Seeing my non-tech friends download Gemini just to make funny images of their dogs, while ignoring the fact that it can code Python.
OpenAI and Google are pouring billions into video (Sora, Veo) and image (Imagen, DALL-E) generation.
At first glance, it seems odd. These tools are expensive to run (high compute cost) and often free or cheap for the user.
But they aren't products. They are Marketing Campaigns.
The "Utility" Ceiling
LLMs are incredible for coding and writing. But most people don't code. Most people don't write essays.
Pure "Utility" has a ceiling of maybe 100M users (Knowledge Workers). To get to 1 Billion users—the scale of Google Search or Facebook—you need something else.
You need Creativity. Everyone wants to make a funny video or a cool image.
The "Nano Banana" Effect (CAC vs. Compute)
Look at what happened with Nano Banana. When Google released this image generator, Gemini usage skyrocketed.
It worked better than promoting "Gemini 1.5 Pro" with a massive context window.
- Techies care about parameters.
- Normies care about making a picture of a cat in a spacesuit.
The Math of Acquisition:
- Old Way: Pay $5.00 for a Google Ad to get a user.
- AI Way: Pay $0.50 in GPU compute to let a user generate a funny image.
The user generates the image, laughs, and shares it on social media. That shared image is a free ad. The viral loop drives CAC (Customer Acquisition Cost) to near zero.
Retention Strategy: The "Trojan Horse"
Sam Altman recently noted that most people use a tiny fraction of what current LLMs can do. They use it as a glorified search engine.
Creative tools are the Trojan Horse. You come for the funny video generator. You stay because you realize the same app can also plan your vacation or summarize your emails.
"Prompting" for art teaches you how to prompt for logic. It is a stealth education program that boosts long-term retention.
Conclusion: The Marketing Budget is now the Compute Budget
These tools aren't just features; they are the new marketing department.
My Prediction: We will see a "Race to the Bottom" on the cost of generation. Google and OpenAI will subsidize video creation heavily because the data (what you want to create) and the user lock-in are worth more than the compute cost.
