AI Agents Could End Web Advertising, says a16z Crypto

Autonomous AI agent commerce could mean the end of online advertising as it is currently known today and shift the internet’s economic model, according to a16z Crypto.

Since the dawn of the internet, buying goods or services typically involves navigating to online stores (some through online advertisements). However, Merit Systems co-founder Sam Ragsdale argues this could change if AI agents do the shopping in the future. 

From 1997 to 2024, the business model for the internet was “distraction,” said Ragsdale in an a16z blog post on Sunday.

“Humans reading a webpage can be distracted by an advert, monetizing their partial attention,” but LLMs and agents “do not get distracted,” he said.

The online advertising market size, which is dominated by search giant Google, was an estimated $291 billion in 2025, according to Mordor Intelligence. 

“There is some beautiful irony in ads creating the free and open internet, which became the 10-trillion-token dataset that created LLMs, leading to the downfall of ads.”

Open protocols are the way forward 

Ragsdale said the first step is already being seen, with AI platforms like ChatGPT and Gemini adding products like “Instant Checkout” for US users last year, allowing them to buy products directly within a conversation without needing to head to an external website. 

Soon, hundreds of millions of consumers around the globe will “find better products, merchants will have improved conversion rates, and platforms will be able to take 5% to 10%,” he said.

However, these “checkout” services are just new “walled gardens,” Ragsdale explained, as merchants have to go through stringent approval processes to be included. 

Related: AI agent payment volumes lower than reported, but adoption is growing: a16z

Instead, Ragsdale argued that the way forward will be AI agents with open protocols that allow them to discover products on their own.

“An agent that can only buy from pre-approved merchants is an employee with a corporate card restricted to three vendors. An agent with open protocols is an entrepreneur with a bank account,” he said. 

Ragsdale concluded that a “clever hack” called advertising changed the internet forever, but in 2026, “that hack is dying,” arguing that open agentic commerce, powered by the x402 protocol developed by Coinbase or the Machine Payments Protocol (MPP) from Tempo and Stripe, is the future.

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