Verizon and AT&T plan post-pandemic 5G marketing blitz, even as consumer use cases remain unclear
U.S. wireless giants AT&T and Verizon had big plans last year to advertise why customers should upgrade their phones and start using 5G wireless.
Then the pandemic hit, and with everyone stuck at home, showing off blazing speeds and consumer use cases in stadiums, airports and public places wasn’t just irrelevant — it was gauche. Cloud gaming, checking instant odds on gambling apps from stadiums and downloading Netflix movies at the airport became far less important than the ability to work from home — a better message for cable companies who already deliver high-speed home broadband.
“We almost lost the year,” said David Christopher, EVP of partnerships & 5G ecosystem development for AT&T. “But now, people are excited to get out of their homes and experience 5G in the wild. We will dramatize use cases that matter to customers.”
AT&T and Verizon want to transfer customers as fast as possible to 5G networks — not just to recoup the heavy capital expenditure costs of building out updated nationwide networks but also to lock in customers and keep them from defecting to T-Mobile.
Both AT&T and Verizon have offered promotional pricing this year on 5G phones to retain customers and entice new ones. But T-Mobile tends to offer the cheapest prices among the big three, while also topping both Verizon and AT&T in download speed and 5G availability, according to Open Network’s July 2021 5G User Experience Report.
“A focus on 5G isn’t going to be flattering to either Verizon or AT&T,” said Craig Moffett, a wireless analyst at MoffettNathanson. “They are falling far behind T-Mobile in what will soon matter most: 5G speed and coverage. And they charge consumers much higher prices than T-Mobile.”
That puts pressure on both companies to sell consumers on why they should choose AT&T and Verizon — making 5G a marketing challenge as Americans emerge from pandemic quarantines.
Convincing consumers
Getting Americans excited about 5G may not be easy.
A J.D. Power survey last year found that only about a quarter of wireless subscribers said they believed 5G would be significantly faster than current 4G LTE technology, and only 5% of respondents said they’d be willing to pay more for 5G service.
Even the CEO of AT&T Communications, Jeff McElfresh, told CNBC last year he has “always tried to soften folks’ expectations around 5G.”
Much of the messaging about 5G so far has been about enterprise solutions. A Deloitte Insights consumer survey this year found that consumer use cases that demand the faster network simply don’t exist yet.
Verizon last year helped produce a documentary on 5G called “Speed of Thought,” which showed enterprise-focused examples, such as a robotic arm that a physician can use from anywhere and an augmented reality helmet for firefighters to help see through smoke. It also explored cities testing out 5G-enabled technology to avoid car collisions.
AT&T leaders have also said 5G’s real opportunity is in the business cases, particularly in the case of machines and equipment that are communicating via internet-of-things technology.
But both companies plan to illustrate specific consumer use cases in advertisements in the coming months to convince customers to upgrade.
In an outline of its 5G strategy for this year, AT&T detailed use cases including AR-aided shopping experiences for consumers in stores and downloading content at airports. Earlier this year, AT&T announced it would give its customers access to Bookful, which creates augmented reality experiences around books to try to improve reading comprehension. Christopher said viewing a street map through a phone is reliable and seamless in 5G, more easily allowing for activity like an augmented reality guide to a city, whereas it would have consistently lagged with 4G.
Verizon is currently running a number of 5G-related TV ad spots, including those with “Saturday Night Live” star Kate McKinnon about a promotion to receive $800 for a 5G phone when consumers trade in their old device.
Verizon has also done some marketing around what its 5G will do for gaming, both in its Super Bowl spot earlier this year and a digital video released in May that tried to illustrate what video game-like lag would look like in everyday life
But the Verizon campaigns don’t yet show why 5G is necessary or important for average consumers.
In one recent Verizon ad, viewers see a series of images — a man climbing a cell tower, a thunderstorm, cars driving on the street, landscape shots of cities — with voiced-over statements about “next generation service,” “broader spectrum,” and “the more going the extra mile matters.” But the only clear consumer use case shown in the one-minute commercial is video chatting — an activity that doesn’t require 5G.
It’s possible 5G advertising could backfire on both companies if consumers view networks as interchangeable and simply choose the lowest-price offering — which will be T-Mobile, Moffett said.
Christopher points out that educating consumers about 5G will benefit the entire industry. “We’re not going to spend our resources talking about the other guy,” he said. “Everything educates the customer about the broad benefits of 5G as a category, and that’s a good thing, too. We’re happy with that.”
Verizon’s 5G Home strategy
Verizon’s 5G marketing strategy hasn’t kicked into full gear yet because the company still hasn’t lit up its nationwide footprint of C-Band spectrum, said Manon Brouillette, recently named Verizon Consumer Group’s chief operating officer and deputy chief executive officer. Verizon CEO Hans Vestberg has promised 100 million Americans will have access to speeds up to 1 Gigabit per second by March 2022.
Brouillette she believes 5G’s biggest selling point is as a replacement for cable broadband once Verizon’s so-called “ultra wideband” network in fully functional. Verizon spent nearly $53 billion on the airwaves earlier this year.
“When it comes to messaging, we need to make sure that any consumer understands you don’t need fiber to home anymore,” Brouillette said. “When C-band is here, we can make a sales pitch where we’ll offer one product, in-home and out-of-home, at low latencies, that has never been offered before. That’s the true game changer.”
Verizon already offers 5G Home that runs on millimeter wave technology — faster than C-band — to parts of 47 U.S. cities.
But even when Verizon’s 5G network is up and running across the country, the company still plans on selling separate products — mobile and home — even though they’ll operate on the same network. Verizon currently sells its 5G Home product at a $20 monthly discount for customers that also buy Verizon wireless.
Verizon is planning more “creative” ways to price home and mobile internet together in 2022, said Brouillette. But that packaging may not be enough to convince consumers to switch to Verizon — especially as cable companies such as Comcast and Charter offer their own mobile services (which use Verizon’s own network) with bundled discounts.
“It’s a myth believing one major ad campaign will solve everything,” said Brouillette. “It will come down to performance and execution.”
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
WATCH: Verizon CEO Hans Vestberg on subscriber growth surprise, outlook
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Altman and Musk launched OpenAI as a nonprofit 10 years ago. Now they’re rivals in a trillion-dollar market
Open AI CEO Sam Altman speaks during a talk session with SoftBank Group CEO Masayoshi Son at an event titled “Transforming Business through AI” in Tokyo, Japan, on February 03, 2025.
Tomohiro Ohsumi | Getty Images
On Dec. 11, 2015, OpenAI launched as a nonprofit research lab after Elon Musk and a group of prominent techies, including Peter Thiel and Reid Hoffman, pledged $1 billion to develop artificial intelligence for the benefit of humanity. The idea was for the project to be be free of commercial pressures and the pursuit of money.
A decade later, that founding mission is all but forgotten.
Musk, now the world’s richest person, is long gone, having created rival startup xAI. And he’s been engaged in a heated legal and public relations fight with OpenAI CEO and co-founder Sam Altman.
Far from the nonprofit realm, OpenAI has emerged as one of the fastest-growing commercial entities on the planet, zooming to a $500 billion private market valuation, with almost all of that value accruing since the company’s launch of ChatGPT three years ago. More than 800 million people now use the chatbot every week.
Musk’s xAI, meanwhile, is expected to close a $15 billion round at a $230 billion pre-money valuation this month, sources familiar with the matter told CNBC’s David Faber in late November.
OpenAI and xAI are two of the main companies, along with Google, Anthropic and Meta, pouring money into AI models, as the market rapidly evolves from text-based chatbots to AI-generated videos and more advanced compute-intensive forms of content, as well as into agentic AI, with large enterprises customizing tools to enhance productivity.
For OpenAI, the price tag is almost incomprehensible: $1.4 trillion and growing. That’s primarily for the mammoth data centers and high-powered chips required to meet what the company sees as insatiable demand for its technology. For now, OpenAI is a cash-burning machine going up against tech’s megacaps and their chip suppliers, drawing comparisons to earlier waves of high-growth tech firms that spent heavily for years to challenge behemoth incumbents, but to mixed results.
“OpenAI has a very big role in the in the history of the development of artificial intelligence, and will forever have that role,” said Gil Luria, an equity analyst at D.A. Davidson, in an interview. “Now, will that role be Netscape, or will it be Google? We’ve yet to find out.”
Nvidia CEO Jensen Huang speaks at an event ahead of the COMPUTEX forum, in Taipei, Taiwan, June 2, 2024.
Ann Wang | Reuters
It’s a position that would’ve been hard to imagine in 2016, when Nvidia CEO Jensen Huang hauled a black DGX-1 supercomputer up to OpenAI’s offices in San Francisco’s Mission District. The $300,000 machine had cost Nvidia “a few billion dollars” to develop, and there were no other buyers, Huang recalled recently on Joe Rogan’s podcast.
Musk, at OpenAI, was the only one who wanted it.
When Musk told him it was for “a nonprofit company,” Huang said all the blood drained from his face at the thought of parking such a costly box inside an organization that wasn’t meant to make money.
Behind the scenes, though, the nonprofit ideal was already under intense strain, and Musk didn’t like what he saw.
“Guys, I’ve had enough. This is the final straw,” Musk wrote in an email to his co-founders in 2017. He warned that he would “no longer fund OpenAI” if it turned into a tech startup instead of a nonprofit. Altman wrote back the next morning: “i remain enthusiastic about the non-profit structure!”
Altman vs. Musk
In February of the following year, Musk left the OpenAI board, and said at the time the move was to avoid a potential conflict of interest as his car company, Tesla, dove deeper into AI.
The story was more complicated.
Musk sued OpenAI and Altman in early 2024, alleging they abandoned the company’s founding mission to develop AI “for the benefit of humanity broadly,” and he’s regularly criticized OpenAI’s close ties to Microsoft, its principal backer. He also went to court to try and keep OpenAI from converting into a for-profit entity and, earlier this year, went so far as to try and acquire the AI lab for $97.4 billion.
In October, OpenAI announced it had completed a recapitalization, cementing its structure as a nonprofit with a controlling stake in its for-profit business, which is now a public benefit corporation called OpenAI Group PBC.
Musk isn’t the only early OpenAI team member who’s turned into a bitter rival. Siblings Dario and Daniela Amodei left OpenAI in late 2020 to form Anthropic, which said last month that Microsoft and Nvidia would invest in the company. The valuation from the funding round could reach as high as $350 billion.
Anthropic’s Claude family of large language models is one of the biggest competitors to OpenAI’s GPT models.
Altman is wagering that he can win the race by outspending the competition. While his company has sketched out plans for a trillion-dollar-plus AI infrastructure outlay, Anthropic has made roughly $100 billion in recent compute commitments, spaced out at various intervals over the next few years.
It all amounts to a giant bet that demand for AI services will continue apace.
“We’ve got all the various AI vendors making these huge capital investments,” said David Menninger, executive director of software research at ISG. “There’s a question as to how long those capital investments continue and whether or not they all pan out.”
Luria says Anthropic and others are making reasonable commitments based on their current growth trajectory and the funding they’ve already secured. But he said OpenAI’s approach has been based on a “fantastical set of commitments” with a “faint belief that those numbers are even possible.”
‘Pretty extreme’
Altman told CNBC in an interview on Thursday that OpenAI is already seeing enough demand to justify its spending plans, which “makes us confident that we will be able to significantly ramp revenue.”
“It’s obviously unusual to be growing this fast at this kind of scale, but it is what we see in our current data,” Altman said, adding that “the demand in the market is pretty extreme.”
Altman said last month that he expects annualized revenue to hit $20 billion by the end of this year and to reach hundreds of billions by 2030. Its historic pace of growth has been a big boon for major tech companies.
Oracle signed a roughly $500 billion deal to sell infrastructure services to OpenAI over five years. Chipmakers Advanced Micro Devices and Broadcom have woven OpenAI-linked demand into multi-year forecasts.
But Oracle’s shares plunged 11% on Thursday after the software vendor reported weaker-than-expected revenue, a miss that dragged down Nvidia, CoreWeave and other AI-related stocks. Despite a surge in long-term contract commitments from companies like OpenAI, Meta, and Nvidia, investors are growing concerned about Oracle’s debt load that’s fueling its buildout.
Still, venture capitalist Matt Murphy of Menlo Ventures, said that in his 25 years in the venture business, “this is the mother of all waves.”
Murphy, an early investor in Anthropic, said the combination of AI models, custom chips and hyperscale data centers adds up to the potential for trillion-dollar outcomes. That explains the eye-popping level of capital expenditures and the astronomical valuations, he said.
Altman recently declared a “code red” inside his company, and shuffled resources to focus on making ChatGPT faster, more reliable and more personal, while delaying work on ads, health and shopping agents and a personal assistant called Pulse. His declaration came after Google released its Gemini 3 model last month, further accelerating the search giant’s ascent in the market.
On Thursday, OpenAI unveiled ChatGPT-5.2, a faster, more capable reasoning model that the company says is its best system yet for everyday professional use. It also struck a three-year, $1 billion content and equity deal with Disney around the Sora AI video generator.
Altman downplayed the threat from Google, telling CNBC that Gemini had less of an impact on the company’s metrics than OpenAI initially feared.
“I believe that when a competitive threat happens, you want to focus on it, deal with it quickly,” Altman said.
He said he expects the company to exit code red by January.
— CNBC’s Kif Leswing contributed to this report.
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