“When money can move inside the experience, imagination explodes.”
For years, artificial intelligence lived behind the scenes—GPUs, models, copilots, enrichment. Useful, reliable, polite. But not that fun.
That era is ending. AI is jumping from artificial intelligence to artificial entertainment (AE): from infrastructure to imagination, from productivity to play. And like every platform shift before it, the leap begins when transactions go native.
The turning point: commerce meets creativity
In mobile, the App Store didn’t become an economy until in-app purchases were native. Before that: a directory of curiosities. After: a market of games, filters, fitness, streaming—entire categories born because they could finally get paid inside the experience.
AI just got the same catalyst. OpenAI × Stripe introduced Instant Checkout (with Stripe’s announcement here): a user asks in ChatGPT, discovers products, and buys directly in the conversation. Under the hood sits an Agentic Commerce Protocol that standardizes how AI, buyers, and merchants transact.
That’s not UX polish; it’s economic infrastructure.
Why it matters: it connects five years of upstream investment (GPUs, model training, orchestration) to the next decade of consumer adoption and monetization.
The consumer stack is (finally) complete
Three layers now snap together:
- Generation — Models and tools producing video, audio, text that evolve on demand:
- Video: Sora, Runway, Pika
- Audio/voice: Suno, ElevenLabs
- Distribution — AI-native feeds that turn outputs into entertainment:
- Meta’s Vibes (generative short-video feed)
- Sora’s announced social app (AI stories as a shareable feed)
- Commerce — Native payments where the content lives:
When generation × distribution × commerce align, you don’t get more tools. You get entertainment ecosystems.
Signals in the data
- AI apps revenue: ~$4.5B in 2024 (triple-digit growth vs. 2023), per industry trackers (e.g., Business of Apps; Sensor Tower).
- Scale of the old model: Apple’s App Store ecosystem has been cited as facilitating over $1T in annual billings & sales (Apple ecosystem reports, 2023–2024).
- Platform reach today: ChatGPT usage is measured in hundreds of millions weekly; Meta reports ~1B monthly using its assistant features (company communications, 2024).
Taken together: users pay for digital leisure; AI is rapidly capturing share; and native transactions are the missing bridge to sustainable consumer AI businesses.
Artificial Entertainment (AE): what changes
AE is where AI stops assisting and starts performing.
- Games that rewrite themselves in real time—levels, items, narratives generated on demand.
- Podcasts that extend as you listen—bonus chapters unlocked mid-episode.
- Music that adapts to mood—real-time stems, voices, and styles.
- Story apps that remember your choices—persistent worlds co-directed by you.
Recent moves point the way: Elon Musk said xAI will release an AI-generated game next year; Meta is blending generative video into its feeds; OpenAI is turning chat into a transactional entertainment surface. These are not demos. They’re distribution + payment + creation converging.
Open questions worth asking:
- What will be the first AE breakout—the “Angry Birds of AI”?
- How will ads look when every feed is model-personalized? (Branded gen-clips, embedded checkout, pay-per-interact?)
- How do studios rethink unit economics and token consumption? (Compute cost per generated minute/asset vs. revenue per action.)
Startups best positioned for AE
The advantage tilts toward teams that already live at the seam between creativity and monetization:
- Creative rails: Runway, Pika (video); Suno, Boomy, ElevenLabs (audio/voice).
- Companion & persona platforms: Character.AI, Replika, Inflection—where personality is the product.
- Commerce enablers: Stripe and emerging agentic SDKs—the plumbing that turns play into business.
- Vertical AE apps: storytime, mood-music, AI worlds—owning the user relationship and transacting in-experience.
What they share: tight creator loops, distribution hooks, and a path to native monetization.
GTM in the AE era: from funnels to feeds
AE won’t scale like SaaS. Think media dynamics, not sales funnels.
How it changes:
- Acquisition via content, not cold start — the product is the marketing. Clips, remixes, and playable moments are the top of the funnel.
- Distribution via feeds, not feature pages — optimize for watch time, session depth, repost rate, remix rate.
- Monetization via micro-commerce — tips, unlocks, cosmetic upgrades, licensed cameos, time-based passes, bundle packs.
- Community as sales — creators and fans co-market; your UGC is distribution.
- Agent-native discovery — agents recommend and transact with agents (“your companion suggests an upgrade mid-experience”).
The loop that matters: Create → Share → Remix → Earn.
GTM becomes go-to-play.
Metrics to track from day one:
- Content: creation rate per DAU, remix rate, share velocity
- Engagement: session time, return frequency, cohort retention
- Commerce: ARPDAU, % paying, conversion by trigger (unlock, tip, cameo), gross margin after compute
Risks and realities
- Compute economics: dynamic generation burns tokens. Model choice, caching, and “good-enough” quality matter for margins.
- Discovery + spam: infinite supply requires provenance, ranking, and taste—AI curation becomes a product moat.
- IP + licensing: opt-in controls, rev-share, and rights catalogs must be built into the rails (or the lawsuits will be).
- Platform power: the agentic payments layer could concentrate leverage; diversify surfaces and negotiate the take-rate early.
A recent review of LLM “app stores” found fast growth and safety gaps (misleading descriptions, privacy issues, toxicity) — the AE boom must ship delight with guardrails (e.g., see overviews on arXiv and industry security write-ups).
The next platform economy
The web had PayPal.
Mobile had in-app purchases.
AI now has agentic commerce.
Infrastructure is no longer the bottleneck. The consumer decade begins now.
Commerce enables creation.
Creation fuels engagement.
Engagement builds economies.
The next billion-dollar AI product won’t optimize your workflow—
it’ll entertain your mind.
Sources & further reading
- OpenAI — Instant Checkout announcement
- Stripe — Newsroom: Instant Checkout & ACP
- Meta — Vibes: AI-generated video feed
- Business of Apps — AI app market overview
- Sensor Tower — State of AI apps (market overview)
- Apple ecosystem reports — App Store billings & sales (2024)
- Commentary on AI safety & LLM app stores — e.g., analyses indexed on arXiv
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