Speaking at the Advantage Travel Partnership conference in Madrid on Tuesday (12 May), Simon Applebaum, Managing Director of Gold Medal Travel Group, said businesses risked getting "very used" to using Google and tools like ChatGPT for free at their peril.
His warning followed a keynote from Times newspaper economic editor Mehreen Khan, in which she outlined the vast nearly $650 billion firms like Microsoft, Google and Amazon are forecast to invest in AI this year.
"It can't be free," said Applebaum. "I can't remember the numbers Mehreen shared earlier, but we're going to have to pay for that. So we're either going to pay for it with advertising, which is going to fundamentally shift these products, or we're going to have to pay for it in subscriptions. We've all got very used to using Google for free for an awful long time.
"At the moment, anybody running a business and embedding it [AI] is doing so with zero idea of what the eventual price tag will be.
"My career coincided with e-commerce. I remember the panacea of free search and SEO. We got rid of a lot of newspapers and magazines and all of the traditional advertising spaces because Google was cheap.
"And guess what? Today, we spend everything we ever spent on brand and above the line media in just one place."
'It's like the Netflix model'
Applebaum said Gold Medal wouldn't rush to "dive into AI too deeply" before the costs become clearer. "Unless the business case is hugely weighted in its favour, which in some instances, it can be, I don't think you should be using it in a frivolous way and building on it because I think the chickens could come home to roost," he said.
Asked by moderator John Sullivan, Advantage's Commercial Director, when he expected those costs to become clearer, Applebaum said three to four years.
"It's like the Netflix model," he continued. "I remember when my Netflix was £4.99, and now it's £20 a month. That just seems to have crept up.
"These companies want what you're paying today for people as revenue. It just places that cost on a different line in your P&L [profit and loss]. The problem is, if you lose those people, you can't go and get them back. You can't go and get back the traditional media that we lost."
Applebaum added consolidation driven by the emergence of AI would inevitably result in there being winners and losers, but warned that unless that investment in AI resulted in "a massive" market advantage, those "creeping costs" would become difficult to maintain.
"I think at the moment, people look expensive because you've got this thing for free," said Applebaum. "Well, it's not free is it? Your first bit's free, but eventually you're going to be dependent. It's the old drug dealer model".
