'Open Agentic Commerce' and the end of ads

Agentic commerce is here.

ACP and UCP promise checkout in ChatGPT and Gemini. 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 5-10%.

But ChatGPT checkout is an incremental improvement. It will not reshape society as the internet did in the early 2000s. Open Agentic Commerce will.

We must go back to the ‘90s to understand why.

There were two different competing versions of ‘the internet’ at the time.

• AOL’s: One price, mail, weather, additional approved content, and eventually the whole Time Warner content library
• Open protocols: HTTP, DNS, HTML, and a browser called Mosaic

Mosaic looked completely ridiculous compared to the first. There were so few sites on Mosaic’s internet that there was no need for search; an alphabetical index was sufficient. 8 years later, AOL merged with Time Warner in a $350B merger-of-equals deal. The market had decided. The curated content bundle was the path forward.

But it was not long before Mosaic and open protocols won, and human civilization stepped into the digital age.

Why? Consider if walled gardens had won.

Mark Zuckerberg wants to start The Facebook in 2004. He needs a distribution deal with AOL. Two kids at Stanford want to index the web. They need CompuServe’s permission. A guy wants to sell books online from his garage. He needs to pitch MSN’s content team.

“Go back to school, little boys,” they say. None of it happens. The entire digital economy we take for granted simply doesn’t exist.

Open protocols meant no gatekeepers. Anyone with a server and a domain name could reach the entire internet. The edges innovated, the center couldn’t keep up, and the result was one of the largest wealth creation events in human history. It’s a fundamental principle of capitalism: innovation comes from the edges.

Back to 1997: Tim Berners-Lee, Marc Andreessen, and co were working on the protocols and the browser. At the time, running a server cost hundreds of thousands of dollars. It was not obvious why a content server would respond to an unknown consumer. It would be expensive to do so, and there was no known financial incentive.

They created a message called ‘402’ that a server could send to a consumer: ‘This content is available for a small fee.’ But there was no sensible way to pay digitally. PayPal did not yet exist, and credit cards had fixed fees in the tens of cents, far too high for 1-cent micro-transactions.

But the web took off anyway.

Google figured out an odd business model for the internet: ads. In historical media, the primary economic relationship is between the content producer and the consumer. Building on the economics of broadcast, Google helped introduce a third party, the advertiser, to pay for the relationship between the producer and consumer.

Ingenious. Now producers could monetize the attention of the viewer. No need for any prior relationship with the consumer. Google sat in the money flow, between the advertiser and content producer, charging whatever take rates they wanted.

So the need for micropayments was averted. Open source software got off the ground, the cloud revolution happened, and hosting costs plummeted 100x. Google became the biggest proponent of the free and open internet. The more consumers searched, the more money Google made. So they invested hundreds of billions to make the internet fast, cheap, and ubiquitous.

And then in the 2010s, nothing happened.

Interest rates were low, technology changed slowly, the walled gardens fed their troops and gathered strength.

In 2022, ChatGPT launched, and the world was set to change again. LLMs could do more than deliver results. They could generate and compile many such results into a handy summary, often without touching the content itself.

By GPT-4, it was clear agents were the next step: LLMs adept at using computers like humans, only cheaper and more effective.

And just like that, the economics of the internet changed.

The business model from 1997 to 2024 was distraction. Humans reading a webpage can be distracted by an advert, monetizing their partial attention. LLMs/Agents do not get distracted.

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.

Stack Overflow views are down 75% since GPT-4, Tech news traffic is down 60%, etc. Tech consumers are early adopters, but it’s coming for all information on the web.

Checkout in ChatGPT doesn’t matter. The internet is civilization’s town square, and the economic contract is now obsolete.

There are small pockets of the internet that have defended themselves from Google’s reach, the proverbial walled gardens with truly differentiated content: Facebook, TikTok, LinkedIn. These are resistant to automated bot scraping thanks to thousands of highly paid engineers working around the clock.

But walled garden defenses just broke too. Computer-use agents perfectly mimic the traffic of real human users. Snake oil salesmen will prescribe cures for the next 10 years, and Sand Hill Road will invest. But there are no cures. The walls of the fortress have been made obsolete by the warplane.

What’s next?

Checkout in ChatGPT is the AOL of agentic commerce. It’s a curated catalog, a walled garden with better UX. To sell through it, merchants need months of BD, stringent legal docs, concrete 5-year plans, revenue, a strong user-base, and a story that will make shareholders happy when it appears on the front page of the NYT.

Open Agentic Commerce is the HTTP of today. A simple set of protocols that let agents pay for anything they need. Data, cloud hosting, communication, and plenty of things we haven’t dreamed up yet.

Two of the front-runners are x402 from Coinbase and mpp from Tempo and Stripe. 28 years after the ‘402’ status code was invented, we have a viable implementation. Stablecoins on modern blockchains have sub-cent fixed transaction costs, solving the exact fixed-fee problem that killed micropayments in 1997.

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.

There’s no BD, no whitelist, just simple permissionless standards.

These protocols focus on exactly two things:

• Agents: “How do I send money?”
• Merchants: “How can I be sure this agent paid?”

LLMs are good at calling tools they’ve never seen before. Starting with the Claude 4.5+ and Codex 5.2+ models, agents can discover an API, read its schema, and use it correctly without prior training.

The current discourse focuses on “skills”. Think of them as natural language programs, which can be composed as building blocks. A non-technical founder can write a Slack message and have it execute as software:

1. Buy pizza from the closest place with good reviews, and track the status every 10 minutes.
2. When the driver is 5 minutes away, turn on the porch light.
3. If delivered in under 30 minutes, send the driver a $5 tip.

No code, no computer science degree. The agent reads the intent, writes a computer-native program just in time, executes it, and throws it away. Programming as a discipline is optional. Literacy in a human-native language is sufficient.

Skills work. But they’re a transitional artifact, the first obvious thing to build once we discovered agents could call unfamiliar tools. They require someone to write, publish, security screen, and update them. And the agent needs them loaded in advance. It’s messy.

The skill discourse hides a deeper unlock: agents can compose capabilities like never before.

Pizza is a toy example. Here’s a real one: An agent managing a small business’s supply chain notices a packaging supplier’s prices have crept up 15% due to tariffs. It discovers three local alternatives, requests samples from each, negotiates volume pricing, and switches. All before the owner’s morning workout.

No API partnership, procurement team, or RFP process. Just an agent with a balance and open protocols.

Discovery

What remains is discovery. For an agent: “How do I find stuff to buy?”, for a merchant: “How do I tell agents about my services?”

Enter AgentCash. It’s a single balance, access to every API on the internet. When an agent gets blocked, it can reach for thousands of APIs, spend pennies, and proceed.

Critically, AgentCash bundles payment and merchant discovery. Merchants can register their servers on x402scan.com or mppscan.com and instantly be exposed to all 2,000+ AgentCash agents.

In 1997, the web had no business model, and no one knew why a server would talk to a stranger. Open protocols and a clever hack called advertising figured it out, and civilization went digital. In 2026, that hack is dying. Open protocols and a 28-year-old status code are about to replace it.

Welcome to the age of Open Agentic Commerce.

***

The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the current or enduring accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; a16z has not reviewed such advertisements and does not endorse any advertising content contained therein.

The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the current or enduring accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; a16z has not reviewed such advertisements and does not endorse any advertising content contained therein.

You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets) is available at https://a16z.com/investment-list/.

The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures/ for additional important information.