Artificial Intelligence (AI) is being hailed as a saviour technology, but the drama is nail-biting. Will the huge investments pay off, or will AI go bust? AI is being hailed as transformational – according to JP MorganChase CEO Jamie Dimon, it will change the world like electricity did. But a strange quiet attends the all-important question of AI’s revenue model. Is advertising going to be adopted? The implications are enormous but the silence continues.For many countries like India, electricity came with industrialisation and nation-building. AI however arrives amidst growing authoritarianism and job loss. It is poised to increase the trend of deepening inequality, the Nobel Prize winning economist Daron Acemoglu has recently noted. Fears are mounting of AI’s downturn, thanks to exploding investment costs and slow yields. There could be a crash before a golden age of AI arrives.Amid signs that advertising might become the answer, Zoho’s Arattai has stated that they will stay ad-free, and that monetisation is not needed “for now”. But most Indian companies are already using advertising to boost user engagement, and thanks to AI are able to package and deliver audiences more successfully than ever before.But first, what is it about AI that makes corporates so eager to invest?Artificial intelligence harvests and privatises social intelligence, through extensive data collection about our online choices. Data analytics and large language models enable AI to nudge or steer our behaviour. This can be used for the public benefit. But for corporations, profits are always more attractive than people, unless the law can persuade otherwise. Only public oversight can ensure AI avoids unnecessary harms.Meanwhile, job losses due to AI are growing. AI investment costs are still steep, and are yielding slow productivity growth at best. So there is a scramble for sustainable monetisation of AI. Already, OpenAI’s ChatGPT predicts nearly $1b in revenue from advertising in 2026, and forecast an annual growth rate of 800% for the next three years. They call it “free user monetisation” though.Why are they running shy of the name? One reason might be Sam Altman’s concern that the user should not become the product, which will happen if ads become the driver. But some are unapologetic, like Meta, where chats with its AI assistant will be monetised for ad revenue.So – what is it about advertising and AI?David Ogilvy and other experts have spoken of a Golden Age of Advertising, when markets were national, media-buying was simple, and “creatives” called the shots. During this golden age however, the Indian advertising industry was tiny, and largely ornamental to the economy, except as part of the state’s communication infrastructure. The Indian government’s DAVP included advertising in its portfolio, and in the Nehruvian period MNC agencies like Thompson, Lintas and Ogilvy&Mather are said to have got the bulk of the contracts.India’s ad industry was therefore not exposed to the rigours of market survival until market liberalisation. Dominated by a few multinational agencies, who were in it for the long haul, ad revenue then has grown more than 300-fold since 1980. The advertising agency saw Indian culture as something to be transcended. They claimed to be a modernising force, and usually that resulted in making the desi element ornamental. Government contracts kept them afloat. Most ad copy in India was conceived in English, the language of an elite minority. It was not until the spread of national television that the ad industry was forced to respond to this obvious fact.It is this peculiar legacy that allowed the ad industry to host liberal and left-leaning public figures like Gerson Da Cunha, Suresh Mullick and Rituparno Ghosh. As late as 1984, in his retirement speech, JWT CEO Subhas Ghosal made no secret of the status of Indian advertising as a protected sector.In the West, by contrast, thanks to superpower rivalry, ads were praised as signs of democracy and freedom. Cuba Libre, the Latin American name for a drink of rum and Coca Cola, expressed a consumer’s response to geopolitics. Freedom of choice meant rejecting socialism.But in India, the importance of the public sector ensured that to some degree socialism was unavoidable – even for the advertising industry. Nor was the relationship one-way. MNCs adapted: boxwallahs became babus and embraced the public sector. Calcutta, despite Naxalism and Communism, was India’s advertising capital until the 1980s, and was known for grooming advertising talent. One of the best-known examples was Clarion, formerly D.J. Keymer’s; Satyajit Ray was among its directors. Clarion’s success was judged by its “creativity” and not its politics.The most peculiar feature of India’s advertising history follows. After 1991, advertisers became critics of government planning and promoters of market liberalisation. Although before that, advertising agencies depended on state support, and adopted state norms including those of secularism.Also read: The Chimera Called AI Hub: The New Face of Tech Dependence and Data ExtractionA revealing moment was Godrej’s Ganga soap launch in 1993, when the other shoe dropped, and secularism too became dispensable. The claim of delivering holy water to consumers clashed with the industry’s Nehruvian ethos, which was enough to jinx the product then. By 2014 however, all secular reserves had given way to a win-win feeling about the market and the Hindu majority both. Thus Piyush Pandey could claim that Narendra Modi was a fantastic product.Today, ads use big data analytics, psychographic profiling and microtargeting. Ads can include “dark posts” visible only to the targeted individual’s Facebook page, eluding all accountability. A now-defunct political advertising agency, Cambridge Analytica, used such methods to actively manipulate elections around the world. We can’t pretend that advertising today is a celebration of freedom of choice.In fact the advertising industry’s character has thoroughly changed. From being a haven for aspiring artists and Bohemian bourgeois, it has become a hive for number crunching and dispassionate analysis. If they previously claimed to produce a poetry of everyday life, today the industry is closer to puppet-masters working for pay. Where are the liberal voices in the Indian advertising industry today, one wonders, and what are they saying about AI?Also read: The Liberal Arts University in the Age of AI and ‘Activism’What causes Mani Vembu, Aravind Srinivas and others to say no to advertising is that it skews AI’s potential towards short-term revenue enhancement over sustainable business development.But the larger Indian public needs to join this debate. Ads in the days when Nirma battled Surf were class wars staged between MNCs and bazaar capitalists. AI-powered ads are already fragmenting the social world, to such an extent that fear and anger now dominate politics. This is not the advertising that we used to know, but a far more dangerous weapon. It shouldn’t fly under the radar any more.Arvind Rajagopal is a professor of media studies at NYU.This piece was first published on The India Cable – a premium newsletter from The Wire – and has been updated and republished here. 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