AI App Store Revolution: Embracing the Future of Apps

In this engaging podcast episode, Motley Fool contributors Travis Hoium, Lou Whiteman, and Rachel Warren delve into:

• The introduction of applications in ChatGPT.
• Exploring potential opportunities for app integration.
• A trillion-dollar question surrounding ChatGPT’s future.

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A complete transcript follows below.

This podcast episode was recorded on October 8, 2025.

Travis Hoium: Does artificial intelligence require its own app store? Welcome to another episode of Motley Fool Money. I’m Travis Hoium, joined by Lou Whiteman and Rachel Warren. We need to unpack the major news of the week: OpenAI’s launch of application features. They have experimented with similar initiatives in the past, such as plug-ins and custom GPTs, with varying degrees of success. However, this time, they are pursuing a much broader vision. This announcement is intriguing because it positions ChatGPT not merely as an AI tool but as a potential operating system for daily life. Several companies, including Zillow, Expedia, and Booking.com, are actively building applications that integrate with ChatGPT. Rachel, what insights can you share regarding OpenAI’s strategic move into applications, and what should investors take note of as this unfolds? Although it’s not precisely an app store, they are indeed developing apps.

Rachel Warren: Absolutely, Travis. It’s fascinating to see how previous efforts have possibly paved the way for this moment. I want to explain how this app system operates and why I believe it could represent a substantial shift from OpenAI’s earlier endeavors. This new app store is a platform integrated directly within ChatGPT, enabling users to engage with third-party applications using natural language in conversation. For example, you can ask ChatGPT to curate a playlist on Spotify or search for homes available for sale on Zillow, activating those applications right in the ChatGPT chat thread. This integration minimizes the need to leave the conversation to access other services, thereby simplifying the user experience. At launch, OpenAI has partnered with several significant companies, including Booking.com, owned by Booking Holdings, Expedia, Zillow, Figma, and even private entities like Canva. It’s worth noting that previous attempts, such as plugins, were limited to text-based access and operated under a rigid, invite-only structure for developers. The chat interface was cumbersome at best, and crucially, monetization wasn’t a central feature. Now, with these new applications, OpenAI is clearly steering towards monetization through a revenue-sharing model. It’s exciting to witness this evolution.

Travis Hoium: Lou, do you foresee this being the future of AI interaction? The vision seems akin to using a smartphone, where you download applications and interact with them directly instead of relying on something like Siri. Instead, this approach encourages companies like Zillow to develop specifically for the AI chatbot, allowing us to access their information seamlessly. Is this the trajectory we are heading towards?

Lou Whiteman: Perhaps. If the functionality matches the demo, it could be groundbreaking. However, we’ve all learned the importance of skepticism regarding demos. My concern lies in the “garbage in, garbage out” problem. AI isn’t genuinely intelligent; it relies on training data. Take Zillow, for example. Their walkability scores often present misleading information. Relying on these scores for tasks, like finding a home with nearby restaurants, could yield subpar results. Numerous issues need addressing, and countless questions arise about the balance between closed ecosystems and open access. I want to be excited about this, but I worry that it might always look better on paper than in practical application.

Travis Hoium: Recent interviews with Sam Altman suggest a larger vision is in play, one that will become clearer in the coming months. Perhaps we should hold off on fully understanding the scope right now. Nonetheless, I find the apps intriguing from an investment perspective due to their potential for disruption. Major technological shifts typically represent significant opportunities and disruptions, like the advent of personal computers or the internet. If ChatGPT establishes itself as the primary means of interfacing with technology, it could diminish the roles of aggregators like Zillow and Booking.com, positioning ChatGPT as the dominant player. Altman even remarked that while they could have simply aggregated data like Zillow, they preferred to collaborate with partners, framing it as a philanthropic endeavor with technology. However, this raises a critical question: if companies lose direct customer relationships to ChatGPT, is this ultimately beneficial, even if they are partnering with a leading AI firm?

Lou Whiteman: There’s so much to unpack here. One major concern is privacy. OpenAI possesses a wealth of data. Can they manage to keep my travel plans private while working with partners? For example, if I plan to visit Toronto, will OpenAI notify every partner about it, potentially compromising my privacy? This is just one layer of complexity. Beyond that, the vision of OpenAI becoming the new Windows is intriguing. Windows succeeded because it was universally compatible. There’s a classic chicken-and-egg dilemma: to attract retailers, you need a large customer base, but you also need retailers to draw in customers. In theory, a seamless experience through OpenAI could revolutionize our interaction with technology, but the path to achieving that is far from straightforward.

Travis Hoium: Rachel, it certainly seems like a fertile ground for disruption if this ambitious vision materializes. However, the clarity regarding its execution remains elusive, especially considering the scale of the undertaking, both technically and financially.

Rachel Warren: I agree, and I want to emphasize that there is potential for multiple players to succeed in this environment. I don’t believe OpenAI’s emergence means that established business models will be completely upended overnight. As you mentioned, it’s still early days. We are waiting to understand how OpenAI intends to monetize this initiative and whether consumers will embrace it widely. It’s essential to consider which companies might face disruption if this platform ecosystem gains traction. Companies whose core business relies on providing user interfaces for specific tasks, such as Apple, Alphabet (parent company of Google), and Microsoft, could find themselves facing market pressures. There are also other firms, like Adobe and Salesforce, already experiencing skepticism amid the AI wave. Traditional search engines, dominated by Google, may also face challenges. OpenAI’s approach to streamline the search process could allow users to engage directly with services within ChatGPT, presenting a risk to companies like Uber or DoorDash, who have built their value on user interaction through specific applications. However, I don’t anticipate a bleak outcome. If this new use case for AI succeeds, it’s likely that consumers will adopt it as just one more tool in their digital toolkit, while strong companies with solid competitive advantages will continue to thrive. In fact, they might leverage this type of tool to enhance their strengths if executed effectively.

Travis Hoium: We will discuss the potential of widening the funnel for some of these applications shortly. You are listening to Motley Fool Money.

Expanding the reach for some of the newly announced applications, such as Peloton, DoorDash, and Target, could enable ChatGPT to facilitate interactions with these services for a broader audience than ever before. Individuals who haven’t downloaded the Peloton app and signed up may now gain access through ChatGPT. The same goes for Target; even if one does not typically shop there, a simple conversation with ChatGPT could introduce them to new offerings. Could this represent an opportunity for these applications to attract new customers rather than a threat? Rachel, I believe this emphasizes the dual nature of disruption. One critical aspect we need to address is how ChatGPT will generate revenue. If a business excels at customer acquisition but struggles to connect with its audience, perhaps ChatGPT could solve this challenge.

Rachel Warren: I indeed think that widening the funnel is a plausible outcome. Moreover, it’s noteworthy that major companies are collaborating with OpenAI from the outset of this app store launch. I doubt these corporations would align with OpenAI if they believed it would merely cannibalize their existing businesses. It seems they perceive this as a significant opportunity.

Travis Hoium: That aligns with how disruption typically unfolds. [LAUGHTER] Look at how Disney sold content to Netflix, effectively empowering their competitors.

Rachel Warren: From a bullish perspective, integrating into the OpenAI app ecosystem could provide numerous companies with a chance to expand their customer base. While basic functions may be commoditized through AI, these companies likely believe they can utilize OpenAI’s platform for more personalized and efficient experiences that encourage users to return to their core services and data. For instance, consider Zillow; if a user utilizes ChatGPT to search for homes in a specific area, they may want to access estimated valuations, 3D virtual tours, or connect with a premier agent. This interaction could lead them back to the Zillow app, making it a gateway to valuable data. This is just one example of how companies could leverage this opportunity. It’s too early to ascertain the full implications of this integration, but it’s also possible that some companies feel compelled to onboard to avoid falling behind.

Lou Whiteman: I have two thoughts on this. Firstly, consider the situation where I’m not a Peloton customer. If I ask OpenAI for fitness advice, will I be bombarded with Peloton offers? [OVERLAPPING] I keep returning to the notion that this all seems more appealing on stage than in practical application. Secondly, who serves as the gatekeeper here? Both Booking and Expedia are partners, but if I want to fly to Minnesota, how is the business allocated? Is it a competitive auction format? If so, it could become costly. [OVERLAPPING]

Travis Hoium: Currently, you would need to specifically visit booking.com for that.

Lou Whiteman: Exactly, but if that’s the case, then we aren’t truly broadening the funnel. I am already a customer. If both DoorDash and Instacart are integrated into this system and one day I mention needing milk, how is that managed? There are numerous complexities. Yes, in theory, if they can navigate these challenges, it’s intriguing, but I keep returning to the meme illustrating that there are many steps missing between initial action and profitability. There’s a lot to figure out regarding the economics and how everything works together. I appreciate the vision; I just have concerns about the execution.

Travis Hoium: Let’s explore whether this represents a tenfold improvement. Disruptive innovations typically require a substantial leap, such as transitioning from traditional math on paper to computing, or accessing encyclopedias online instead of in physical formats. Mobile devices made information readily accessible in our pockets. All these transformations offered significant enhancements. Is consolidating functions into one app truly the transformative improvement needed to persuade us to adopt OpenAI as our all-in-one solution, rather than continuing with our current methods?

Lou Whiteman: Another aspect to consider is that most shopping experiences are not as glamorous as these presentations suggest. Most shopping is about fulfilling practical needs, like buying groceries. I question whether a killer app is required for such tasks. While I can see the concept, the execution raises concerns regarding day-to-day usability for average consumers.

Travis Hoium: Let’s discuss one of the potential dark horses: Target. It’s notable that they are among the companies launching apps soon. Unlike tech giants, Target represents a traditional retailer struggling in the big-box space. This situation might offer them a chance to attract new customers. Could this open doors for companies that are not as tech-centric? As you mentioned earlier, Amazon has dominated the market, but companies like Target might leverage this opportunity to not only avoid falling behind but to actively engage with consumers who may not have a strong digital presence.

Rachel Warren: There is certainly potential for traditional retailers like Target, especially those with robust online capabilities. However, the effectiveness of this strategy hinges on its utility to consumers. The core idea is that while shopping on ChatGPT, rather than toggling between multiple apps, users can direct ChatGPT to access specific apps for their searches. This could resonate well with consumers who often use their devices for shopping. As for Target, they have faced significant challenges in recent years, particularly post-pandemic. They have been integrating various AI tools into their operations, including using generative AI for product display optimization on their website. Last year, they introduced a proprietary generative AI chatbot called Store Companion for employees. By capitalizing on their unique strengths and building competitive differentiation, they could create a seamless, personalized shopping experience. While this may not resolve all of Target’s current challenges, it could enhance user engagement with their platform.

Lou Whiteman: I don’t want to single out Target since I enjoy shopping there, but it’s more of a destination for practical needs than a space for inspiration. I question whether a customized AI experience is necessary for such straightforward purchases. Most of my shopping is driven by necessity, not exploration.

Rachel Warren: Some of us enjoy exploring Target’s aisles while dreaming, Lou! You might be surprised at how many find joy in that experience. [LAUGHTER]

Lou Whiteman: Maybe so, but I appreciate their curbside pickup and delivery options. They have implemented some great initiatives. My concern remains that this feels like a solution looking for a problem for Target.

Travis Hoium: We will have to wait and see how this all unfolds, especially with potential new devices that could change the game. Next, we will tackle the trillion-dollar question: how will OpenAI and its partners fund these initiatives? You are listening to Motley Fool Money.

Welcome back to Motley Fool Money. The trillion-dollar question for OpenAI is how they will finance all these partnerships, which are estimated to cost around $1 trillion and may even exceed that figure at this point. Will these new applications help address this challenge? If we look closely, a potential monetization strategy emerges, but it remains unclear. Lou, is this the pathway to OpenAI becoming a self-sustaining entity capable of covering its substantial computing costs?

Lou Whiteman: Travis, let’s be honest. Sam Altman claims his focus is on enhancing customer experience, not on monetization. While that’s understandable, we need to scrutinize how this can translate into significant profits, especially if it is merely an incremental improvement. The chicken-and-egg dilemma persists: to monetize effectively, you need a substantial number of retailers on board, but how do you attract those retailers without a significant consumer base? It’s a cycle of experimentation and potential losses. The focus on customer experience is essential, but are we heading towards a world dominated by walled gardens? Will I only have access to Target through ChatGPT and not other options?

Travis Hoium: It appears that OpenAI aims to create such an ecosystem, even while claiming that’s not their intention.

Lou Whiteman: Indeed, I believe OpenAI desires to be omnipresent, compelling every retailer to join, akin to how retailers are expected to be on major platforms today. However, currently, I can use Google to explore options broadly. Perhaps in a scenario where I specifically need something and know that Booking is available on OpenAI, I would opt for that, but relying solely on this model won’t lead to massive profits. If OpenAI becomes a closed system, commoditization may not serve them well, making it difficult to charge effectively. This approach could complicate consumer adoption, posing challenges for OpenAI to leverage its full potential.

Travis Hoium: What are your thoughts, Rachel? Is this the glimpse of OpenAI’s revenue model, and is it substantial enough?

Rachel Warren: I believe it’s premature to draw conclusions. OpenAI appears to be in the exploratory phase of defining its monetization strategy. The challenge lies in the significant investment required for training and operating advanced models like Sora, which demands extensive computing power and infrastructure. The new app store seems to aim for a commission-based revenue model for commerce queries, moving away from traditional advertising. I’ve come across reports suggesting a potential 2% affiliate fee, alongside the substantial investment in the Sora product, indicating a shift towards a tiered subscription model.

Travis Hoium: A 2% affiliate fee may seem attractive, but when compared to advertising costs on platforms like Meta, which can reach 20% to 30% of purchase prices, it’s worth considering.

Rachel Warren: When analyzing this further, it becomes evident that the revenue potential of these new initiatives remains uncertain, especially regarding their contribution to the company’s profitability. The primary and most immediate revenue source is likely to stem from enterprise partnerships, and OpenAI continues to secure substantial funding rounds. They are actively refining their monetization strategy and assessing various approaches.

Lou Whiteman: A crucial lens to consider is that OpenAI may require these initiatives more than their competitors do. Companies like Meta have a steady stream of revenue to support their projects, while Alphabet is backed by Google. OpenAI, being a nonprofit entity, has the flexibility to maneuver beyond some SEC regulations, allowing for creative strategies. This can be beneficial, but it also means they need to showcase their progress and potential.

Travis Hoium: That strategy has proven effective.

Lou Whiteman: Right, and it aligns with their vision for the future. However, I don’t see this as a guaranteed success. As I observe the situation, it feels like a company engaged in wishful thinking while simultaneously attempting to implement their vision. Part of this involves adapting and sticking with what works.

Travis Hoium: As you mentioned before, they must continue investing to remain competitive with large firms like Alphabet and Meta, which are pouring billions into their projects. This is likely why OpenAI keeps expanding its vision. There may be a pot of gold at the end of the rainbow, but only time will tell. As always, participants in this program may have interests in the stocks they discuss, and The Motley Fool may have formal recommendations regarding them. Therefore, do not buy or sell stocks based solely on this discussion. All personal finance content adheres to The Motley Fool’s editorial standards and is not subject to approval by advertisers. Advertisements are sponsored content provided for informational purposes only. Please refer to our full advertising disclosure in the show notes. For Lou Whiteman, Rachel Warren, Dan Boyd behind the scenes, and the entire Motley Fool team, I’m Travis Hoium. Thank you for tuning in to Motley Fool Money. We’ll see you here tomorrow.