AppLovin backs AI startup Velocity to monetise user intent via advertising

Advertising technology firm AppLovin has invested in Velocity, a startup building monetisation infrastructure for artificial intelligence applications. The deal provides the AI company with backing from an established player in the digital ad market as it seeks to scale its platform across iOS, Android, and the web.

Generative AI applications face a growing economic challenge as user bases expand. While these tools attract millions of users, the computational costs of supporting complex interactions are rising, making traditional subscription models insufficient to capture the value of free users.

Velocity attempts to solve this by monetising interactions through advertising based on real-time user intent. Instead of relying on historical browsing data, the infrastructure interprets what a person is explicitly asking an AI to accomplish at that exact moment.

This approach could fundamentally alter how software companies generate revenue. By connecting commercial recommendations directly to the context of an AI conversation, developers can offer expanded free access while using ad revenue to offset operational costs.

Tal Shoham, chief executive and co-founder of Velocity, described the investment as a major endorsement of this strategy. “We’re incredibly excited to welcome AppLovin as an investor in Velocity,” Shoham stated.

The partnership highlights a transition in the technology sector from competing purely on AI capability to focusing on sustainable economics. If AI assistants become primary gateways for product discovery, advertising mechanics may shift away from keyword-based search toward conversational intent.

Shoham noted that the involvement of a major adtech firm provides crucial momentum for their ambitions. “Having one of the world’s leading advertising technology companies join us on this journey is a powerful tailwind as we build the monetisation and distribution infrastructure and the growth engine for the AI era,” he said.

Velocity previously secured $27 million in seed funding led by NFX and Red Dot Capital Partners. Shoham founded the company alongside Amir Shaked and Nimrod Zuta, who previously held executive roles at ironSource and Unity.

The startup claims its technology currently monetises millions of AI interactions daily across multiple platforms. As the market matures, infrastructure providers that help applications generate consistent revenue across fragmented environments will likely become essential components of the digital economy.

Reflecting on the company's trajectory and the broader market transition, Shoham noted the early stage of this economic shift. “We’re still at the very beginning, and couldn’t be more excited for what’s ahead,” he said.