While many focus on artificial intelligence’s impact on Google Search, the company’s video platform YouTube is best positioned to be the biggest beneficiary of the technology. Ben Thompson writes on his website Stratechery that YouTube’s business model is perfectly suited to leverage AI for both content creation and monetization.
According to Thompson, AI represents a sustaining innovation for YouTube, contrasting with the disruptive threat it poses to Google’s search business. The platform already excels at filtering immense quantities of user-uploaded videos to surface compelling content. AI tools will simply increase the volume of available videos, which Thompson suggests will lead to an absolute increase in high-quality content through sheer numbers.
Thompson points to new features as evidence of this strategy. Google is integrating technology from its DeepMind AI lab directly into the platform. One example is Veo 3, a powerful video generation model that allows users to create YouTube Shorts from simple text prompts. These tools enable users to generate or edit videos with sound, animate photos, or convert speech into song, significantly lowering the barrier to video creation.
The most significant AI-driven opportunity for YouTube lies in monetization, Thompson writes. He highlights a new feature that uses AI to automatically identify and tag products within videos at the exact moment they are mentioned. This saves creators time and has the potential to turn every object in every video into a shoppable item. Thompson believes this could make every pixel on the platform monetizable, creating a massive new inventory for ads and affiliate links. He suggests this puts Google ahead of competitors like Meta in realizing this potential.
Thompson concludes that the long-term future of media may favor video over text. He observes that while the tech and media world often focuses on text-based AI like chatbots, the general public is more engaged by video and entertainment. By strengthening its dominance in video with AI, YouTube could become Google’s most valuable asset and secure its position as an AI leader.