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Ads, Subs... Or both

YouTube wants to look a little more like Netflix... Netflix feels the same

YouTube’s latest move shows it’s doubling down on subscriptions, while Netflix wants a piece of its ad game.

2/24/25 11:22AM

YouTube has made billions from ads. Now, it keeps exploring ways for users to pay to see fewer of them.

According to Bloomberg, the streaming giant is planning to roll out a cheaper, ad-free subscription tier called “Premium Lite” in several markets, including the US and Australia. For less than the current $13.99/month price, users can ditch ads on most content — music videos being the crucial exception.

The move makes sense, given YouTube’s deep reliance on advertising: in 2024, it pulled in a staggering $36 billion from ads alone, just shy of Netflix’s entire $39 billion haul. That’s even before factoring in what YouTube makes from its more than 100 million Premium and Music subscribers.

While Alphabet doesn’t reveal the exact splits between YouTube’s ads and subscription revenues, the company revealed last year that YouTube’s total revenue topped $50 billion for the first time during the 12 months ending Q3 2024. Some quick math shows that 70% of sales came from ads, with the remaining ~30% from subscriptions. Two weeks ago, YouTube hit another major milestone, saying that more people now watch YouTube on TV than on phones — further evidence that YouTube, rather than Disney or Amazon, might be Netflix’s stiffest competition for attention after all.

Of course, while YouTube is going after subscribers, Netflix is making moves in the opposite direction.

Once famously anti-ads (cofounder Reed Hastings once criticized ads for “exploiting users”), Netflix changed course in 2022, launching a cheaper, ad-supported tier after suffering its largest-ever subscriber loss. Two years later, over 55% of new sign-ups in ad-supported regions now opt for this ad-backed plan.

Still, ads are “not a material component” of Netflix’s total revenue, per its latest annual report. But the subscription juggernaut expects its ad business to “transition from crawl to walk” in 2025, Co-CEO Gregory Peters said during last month’s earnings call.

Rani Molla

Tunnel Vision

Tesla gets permit to test autonomous cars in Nevada as autonomous driving heats up there

Amazon’s self-driving Zoox launched service this week, and Google’s Waymo is testing there.

Las Vegas Exteriors And Landmarks - 2024

Jon Keegan

22h

OpenAI and Microsoft reach agreement that moves OpenAI closer to for-profit status

In a joint statement, OpenAI and Microsoft announced a “non-binding memorandum of understanding” for their renegotiated $13 billion partnership, which was a source of recent tension between the two companies.

Settling the agreement is a requirement to clear the way for OpenAI to convert to a for-profit public benefit corporation, which it must do before a year-end deadline to secure a $20 billion investment from SoftBank.

OpenAI also announced that the controlling nonprofit arm would hold an equity stake in the PBC valued at $100 billion, which would make it “one of the most well-resourced philanthropic organizations in the world.”

The statement read:

“This recapitalization would also enable us to raise the capital required to accomplish our mission — and ensure that as OpenAI’s PBC grows, so will the nonprofit’s resources, allowing us to bring it to historic levels of community impact.”

A joint statement from OpenAI and Microsoft

The statement read:

“This recapitalization would also enable us to raise the capital required to accomplish our mission — and ensure that as OpenAI’s PBC grows, so will the nonprofit’s resources, allowing us to bring it to historic levels of community impact.”

Rani Molla

9/11/25

BofA doesn’t expect Tesla’s ride-share service to have an impact on Uber or Lyft this year

Analysts at Bank of America Global Research compared Tesla’s new Bay Area ride-sharing service with its rivals and found that, for now, it’s not much competition for Uber and Lyft. “Tesla scale in SF is still small, and we don’t expect impact on Uber/Lyft financial performance in ’25,” they wrote.

Tesla is operating an unknown number of cars with drivers using supervised full self-driving in the Bay Area, and roughly 30 autonomous robotaxis in Austin. The company has allowed the public to download its Robotaxi app and join a waitlist, but it hasn’t said how many people have been let in off that waitlist.

While the analysts found that Tesla ride-shares are cheaper than traditional ride-share services like Uber and Lyft, the wait times are a lot longer (nine-minute wait times on average, when cars were available at all) and the process has more friction. They also said the “nature of [a] Tesla FSD ‘driver’ is slightly more aggressive than a Waymo,” the Google-owned company that’s currently operating 800 vehicles in the Bay Area.

Apple AI was MIA at iPhone event

A year and a half into a bungled rollout of AI into Apple’s products, Apple Intelligence was barely mentioned at the “Awe Dropping” event.

Jon Keegan9/10/25

Jon Keegan

9/10/25

Oracle’s massive sales backlog is thanks to a $300 billion deal with OpenAI, WSJ reports

OpenAI has signed a massive deal to purchase $300 billion worth of cloud computing capacity from Oracle, according to a report from The Wall Street Journal.

The report notes that the five-year deal would be one of the largest cloud computing contracts ever signed, requiring 4.5 gigawatts of capacity.

The news is prompting shares to pare some of their massive gains, presumably because of concerns about counterparty and concentration risk.

Yesterday, Oracle shares skyrocketed as much as 30% in after-hours trading after the company forecast that it expects its cloud infrastructure business to see revenues climb to $144 billion by 2030.

Oracle shares were up as much as 43% on Wednesday.

It’s the second example in under a week of how much OpenAI’s cash burn and fundraising efforts are playing a starring role in the AI boom: the Financial Times reported that OpenAI is also the major new Broadcom customer that has placed $10 billion in orders.

Exclusive | Oracle, OpenAI Sign Massive $300 Billion Cloud Computing Deal