Welcome to the age of AI advertising - #0086, Tal Shoham

Days before Tal Shoham announced that his AI monetization startup Velocity had closed a $27 million Seed round, an independent tracker put a number on something the industry had only been speculating about: ChatGPT ads were showing up in roughly 26.5% of all replies globally, and 49% of replies in the United States. For Shoham, that timing is the proof of concept for his newest company and a sign of the latest change in the AI era. “ChatGPT, of course, has added ads now, which is amazing for us and for the industry, because it’s like a north star that everybody looks at,” Shoham told me.He co-founded Velocity alongside Amir Shaked and Nimrod Zuta, all three of whom are former senior executives at ironSource and Unity. The company is building what it calls a growth infrastructure layer for AI-native applications: an ad network, a mediation and auction system, and a “conversation intelligence” layer that turns chatbot dialogue into structured, privacy-safe intent signals. Basically, it’s helping bring adverts to your favourite AI agent. The round was led by NFX and Red Dot Capital Partners, with participation from Stardom Ventures, Corner Ventures, and Transcend, alongside a roster of gaming and ad-tech angels, including former ironSource co-founder Omer Kaplan.The pitch is a straight transplant of the problem his team spent a decade solving in mobile gaming, with one crucial difference. “Ninety-five percent of the users in gaming will never pay a dime,” he said. “You really want to try to find a way of monetizing those users.” In gaming, a free user costs almost nothing. But in AI, that math is inverted: “Every free user that you have on your AI platform is actually costing you a lot of money on inference, tokens, GPUs, and so on.”That inversion is the reason that AI companies have defaulted to hard limits (two or three free prompts a day) rather than the generous free tiers that built mobile gaming and social media into mass-market platforms. He bets that an advertising layer can fund broader free access without those companies bleeding cash, and that doing so improves retention rather than damaging it. “We have more than 12 design partners live already,” he said. “This doesn’t harm retention, it doesn’t harm engagement, it doesn’t harm conversion to monetization.”But the timing that makes Velocity’s raise look prescient also drops it into the middle of an unresolved trust problem - one that OpenAI itself has been actively renegotiating in real time. ChatGPT’s original ad policy excluded placement near politics, health, and mental health topics, with a standing ban on dating, alcohol, drugs, and gambling. But a June 2026 update already suggested that current advertising categories “may expand over time” to include medical, legal, and financial advice contexts eventually. In other words, the rules of the road are being written after the road has already opened to traffic. It’s a pattern that anyone who lived through Europe’s post-hoc arrival at GDPR will recognize as headache-inducing.I pushed Shoham directly on where that leaves the user. Chat conversations are not basic search queries: they’re often confessional, emotional, and far more revealing than anything a keyword ever captured. “There’s a lot more emotion behind what people are giving these algorithms,” I said. “It’s not just tapping into data points... It’s tapping into a real human feeling.”Shoham’s answer leaned on the compliance muscle memory his team built at ironSource, navigating GDPR and a patchwork of state and platform-level privacy rules for years. “We don’t take any of the private information from the user,” he said. “If you type in something on health, something sensitive, your social security number, or whatever it is, we’re not saving that, we’re not taking that, and we’re not integrating that into the model when we’re trying to find the right ad to show you. We have an abstraction layer that actually abstracts all the sensitive information.”So, whereas search reads your keywords, social media reads your behavior, AI just reads you. Velocity’s bet is that the same compliance discipline that got ironSource through GDPR can keep that power in check… but with ChatGPT's ad rollout already outrunning its own written rules, that's a promise the whole industry is now testing in public.Preview: The Next Google Ads? Inside Velocity’s $27M Bet on AI “Intent” Get full access to The Spiro Circle at www.thespirocircle.com/subscribe