Week 4 in AI: Davos 2026 crowns ‘Physical AI’ as the next era, OpenAI pivots to ads and hardware, Humans& raises historic $480M seed, and energy infrastructure becomes the primary bottleneck for $85T projected growth.

📋 Quick Takeaways

• OpenAI officially introduces advertising to its chatbot interface, marking a pivotal shift in its revenue strategy beyond subscriptions.
• Meta CTO Andrew Bosworth confirms the internal delivery of new “Avocado” (text) and “Mango” (media) models from their Superintelligence Labs.
• Google DeepMind CEO Demis Hassabis tells Davos that Chinese AI firms are trailing US frontier models by approximately six months.
• Microsoft CEO Satya Nadella identifies “energy costs” as the primary deciding factor in the global AI race.
• Nvidia invests $150M in Baseten as part of a $300M round, valuing the inference startup at $5 billion.
• ServiceNow and Schneider Electric double down on “Agentic AI” to automate complex enterprise and energy workflows.

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💰 Business Models & Frontier Models

OpenAI Begins Offering Chatbot Ads to Advertisers

Revenue Pivot: In a report surfacing Tuesday, The Information confirmed that OpenAI has officially begun offering “chatbot ads” to dozens of advertisers. This marks a historic shift in OpenAI’s business model, moving from a purely subscription/API focus to an ad-supported ecosystem directly within its conversational interfaces. Industry Impact: This move challenges traditional search advertising dominance and introduces a new battleground for commercial attention within AI responses. Source: Radical Data Science