11 Ways To Use AI To Generate Passive Income PLUS the 5 Best Artificial Intelligence Tools To Help You

September 22, 2023

Ways to use AI to generate passive income are:

  • Rank a local lead generation website using AI
  • Use AI to write blog content
  • Write and publish eBooks with AI to earn royalties
  • Create and sell an online course using AI
  • Develop custom AI chatbots for small businesses

Artificial intelligence is set to take the working world by storm over the coming years. In fact, billionaire investor Ray Dalio believes that AI could create a 3-day working week. Although we aren't quite there yet for the broader working population, there are ways that saavy individuals can start leveraging AI to generate tens of thousands of dollars in passive income today.

AI passive income isn't just possible, it's a reality for those who take the time to explore passive income opportunities and assess the potential for AI integration. AI technology like ChatGPT and Midjourney are revolutionizing the way people are making money. Generative AI can take simple human inputs and generate some seriously impressive outputs that even the most advanced minds in fields like content creation and computer science can no longer ignore. Here are some of the best ways to use AI to generate passive income in 2024, and which are the best tools for the task. 

1. Rank a local lead generation website using AI 

A local lead generation website is a piece of digital real estate that earns passive income by generating customers for local service businesses, such as a lawn maintenance business in a Chicago suburb. Creating a local lead generation website entails setting up a business website, using local SEO to rank the website in the Google map pack so that customers searching for that service in that area click into your website, and then passing the customer leads to an actual service business in that location to perform the service for the customer for a fee. Typically, the fee a business will pay to receive leads from a local lead generation website ranges from $500 to $3,000/month. A local lead generation website provides a local service business with an efficient form of marketing in organic search that increases their profit potential. Because of this, they are often willing to pay and continue the relationship for the long-term, putting passive income into your pocket each month. 

You can use AI to start generating passive income with local lead generation websites by using it to set up your websites, keyword research, content optimization, and review automation. For website development, there are a range of AI tools on the market, such as Wix ADI, that can enable you to create professional looking websites by answering simple questions. For tasks like keyword research and content optimization, there are AI applications available that can help you decide which keywords you should incorporate into your article to attract the right local audience and how those keywords can be dispersed throughout your content in the most efficient manner. Reviews are another major contributing factor for local SEO because they directly influence your ranking in the Google map pack. Fortunately, there are Google review AI tools like Reviewly.AI already on the market to streamline obtaining reviews.

2. Use AI to write blog content

Around 77% of internet users read blogs, according to Social Media Today. As such, blogs are a great way to reach audiences online. Where there’s an audience, there’s also excellent income potential. In fact, the average blogger earns around $84K/year, according to Glassdoor. However, some professional bloggers, like Tim Sykes, earn millions of dollars per year from their blogging efforts. Bloggers are able to make this kind of money by using a range of monetization tactics like affiliate marketing, Google AdSense, sponsored posts, and selling their own custom merchandise and digital products.

The primary task required to run a successful blog is to create high quality content within a predefined niche. Fortunately, there are many AI tools that can produce high quality written content generation for blogs, such as ChatGPT or Surfer SEO. Once an AI-generated blog post is published, it can continue earning you passive income for years as it continues to attract an audience and generate money.

3. Write and publish eBooks with AI to earn royalties

Platforms like Amazon KDP and Google Play Books allow you to self-publish eBooks online and earn ongoing royalties from the sales. Because you just need to publish these eBooks once, all the royalties you earn after publishing are passive income. Authors that self publish books through Amazon KDP and Google Play Books can earn upwards of 70% in royalties for their works, with books typically priced between $2.99 and $9.99. As an example of the earnings potential here, a self-published author on Amazon Kindle can make anywhere from $150 to $20,000 per month, according to Amazon toolsuite ZonGuru. 

Generative AI tools like ChatGPT can help you write an eBook that gets sales from start to finish. They can help you decide which niche to write about, come up with an excellent outline that flows well, and then create pages of content to fill out your book. Then, you can use other AI tools that specialize in grammar and readability, like Quillbot, to edit your work and prepare it for publishing online. 

4. Create and sell an online course using AI

As of 2022, the e-learning industry is valued at approximately $399.3 and is expected to grow at a 14% rate each year for the foreseeable future, according to Global Market Insights. As such, online course creators are set to make some major cash. According to Online Course Host, selling online courses can net you between $1,000 and $100K+ per year. Just think, there are courses that earn their creator over $100K in profit per year on just a few dozen sales or less. For example, Private Label Masters course creator, Tim Sanders, sells the course for $5,000. He is earning some serious passive income on a course he created years ago. 

With the AI tools available today, you can plan and generate online courses with AI. You can use an AI tool like Chat GPT to plan the content for each of the course modules and then use AI animation generator tools like Vyond or Moovly to create high-quality visual content to enrich the experience for students. Although you can technically research anything and create an online course, it’s usually best to choose a topic you have some experience in so you can ensure the accuracy of the content.

5. Develop custom AI chatbots for small businesses

Approximately 84% of companies believe AI chatbots will become extremely important for customer communication, according to CCW Digital. Additionally, business research advisory company and member of the S&P 500, Gartner, predicts that Chatbots could become the primary customer support channel for at least a quarter of all companies by 2027. You can capitalize on this trend by working with companies to set up custom AI chatbots on their website or social media accounts. To make passive income from this opportunity, it would be best to charge each company an ongoing monthly subscription fee to continue using your Chatbot. 

An AI chatbot requires you to train the language model to produce the type of responses you want. You do this by showing it how common questions should be answered and what type of terminology should be used. As such, specializing in creating chatbots for a specific business niche, such as dentist offices, enables you to establish expertise in the typical conversations that type of business has with their customers and train your chatbots accordingly. To get started and make money with AI bots, you can find chatbot templates on platforms like ChatFuel and ManyChat. 

6. Develop a mobile app using AI

The amount of smartphone mobile network subscriptions worldwide hit nearly 6.4 billion as of 2022, according to Statista, indicating that upwards of 85% of the global population utilizes these devices and the mobile apps available through them. Therefore, the potential customer reach is absolutely massive for those that develop these mobile applications. Mobile apps can allow you to make passive income through a variety of monetization methods, like:

  • Charging recurring subscriptions
  • Enabling Google AdSense to earn advertising revenue
  • In-app purchases

Mobile apps ranking in the top 200 on their respective app store can even generate around $82,500 per day in revenue, according to MCRO Tech, while those that are in the top 800 still average approximately $3,500 in revenue. Fortunately, you can now leverage a no-code AI platform like Appypie to develop an AI powered app by just describing your project with natural English sentences.

7. Use AI for YouTube automation channel content

YouTube automation is a way to generate passive income online by setting up a niche YouTube channel and outsourcing all of the work required to run the channel to a team of freelancers and software tools, like AI. YouTube automation channels generate passive income through:

  • AdSense advertising revenue
  • YouTube premium revenue
  • Affiliate marketing
  • Sponsorship deals
  • Print-on-demand products
  • Digital products
  • YouTube channel memberships

As an example of the monetization potential here, YouTube channels get paid around $18/1,000 video views just in advertising revenue, so channels with hundreds of thousands or millions of views can rake in some serious money just from that one revenue source. YouTube videos stay online forever and can continue generating passive income for a long time. Furthermore, because the premise of YouTube automation is outsourcing all the work, all the money you make is passive income. 

In order to run a successful YouTube automation channel, you need to outsource:

  1. Research and optimization
  2. Scriptwriting
  3. Voice over
  4. Video editing
  5. Thumbnail design
  6. YouTube channel management

At this point, AI can be used to handle the majority of these tasks. AI-powered keyword research tools like VidIQ can be used to research video topic ideas and optimize YouTube descriptions with SEO. AI generative content tools like Chat GPT can handle scriptwriting. AI Voice generation software like Murf AI can be used to convert your script into a high quality AI voice to play over your videos. There is AI video editing software, like Kapwing, that can be used to edit your YouTube automation videos, and AI YouTube thumbnail generators, like Appy Pie, that can quickly generate a captivating thumbnail to attract your audience to click into your video. You’ll probably need to hire someone to handle YouTube channel management if you want to make it totally autonomous, but the rest you can mostly outsource to AI. 

8. Use an AI advisor to create an investment portfolio

According to CNN, “ChatGPT can pick stocks better than your fund manager.” Although the accuracy of that statement is still being tested, people are starting to leverage AI to manage their investment portfolios. An AI model like ChatGPT can use data analysis and predictive analytics to provide investors with valuable insights that can be used for automated trading and investing. In fact, over 40K investors have invested more than $35 million alongside the GPT Portfolio, an investment portfolio of stocks selected specifically by ChatGPT. The fund has performed exceptionally well at times. It was able to outperform 7 of the top 10 US investment funds as of 5-weeks post launch, according to Business Insider. 

Investing is an original method of making passive income that people have been using for hundreds of years. Stock investing pays passive income through both the dividend income that is received as well as the capital gains that are achieved when the stock goes up in value from when you purchased it. 

9. Invest in AI companies

Another way to make passive income with AI through stock dividends and capital gains is to just invest directly into AI stocks. AI is clearly leading the next wave of technological advancement and many companies are rushing to support this industry with AI adaptations and supportive hardwares of their own. Some of the leading companies that are set to benefit from the ascension of AI technology include:

  • Microsoft Corp (MSFT)
  • Alphabet Inc. (GOOG)
  • Nvidia Corp. (NVDA)
  • Meta Platforms Inc. (META)
  • Taiwan Semiconductor Manufacturing Co. Ltd. (TSM)
  • Baidu Inc. (BIDU)
  • Arista Networks Inc. (ANET)
  • SAP SE (SAP)
  • ASML Holding NV (ASML)
  • IBM (IBM)

10. Sell data to AI companies

AI algorithms require vast amounts of data to learn and improve their function. If you have a company or internet property that collects valuable consumer data, you can monetize that data by selling it to AI applications that need it for data science and machine learning purposes. Some types of data that would be valuable to AI companies are consumer actions, transaction history, personal details, and more. You can turn this data into a passive income stream by automating the collection and congregation of the data and then license the use of the data for a subscription fee.

11. Sell AI-generated art

With internet users spending an average of 6 hours and 40 minutes per day online, according to Statista, digital art has become a lucrative industry with high demand. Digital art is used across the internet to attract users in contexts like advertising, branding, and more. Just look at the NFT craze of 2021, when people were buying digital art with seemingly no intrinsic value other than pure speculation for tens of millions of dollars. For example, The Merge by Pak’s sold for an astounding $91.8 million. Although the digital art that can be seen across the internet once required a graphic designer for creation, that is no longer the case. 

These days, AI generated art is starting to be implemented in places across the internet, from paid advertising banners to profile pictures. You can legally use AI-generated images because it is not protected under copyright law. According to a US federal court ruling, copyright law is only applicable to human created content. You can sell AI-generated art as your own. It is okay to sell AI-generated art if the images are licensed for commercial use. For example, popular AI art platform Midjourney permits commercial use of images generated through its paid membership subscription. AI generated art is worth what someone is willing to pay for it, which means the price tag is highly variable depending on the situation. For example, the most expensive piece of AI-generated traditional art that ever sold earned the seller $432,00, according to MSPowerUser. It was sold in 2018 and called Portrait of Edmond de Belamy. However, a graphic image for a paid advertising campaign might only sell for $10 to $100, so the worth of your AI generated art can vary greatly. 

For those looking to make passive income from AI generated art, licensing out artwork packages through platforms like Etsy and Shutterstock is an opportunity to make passive income. You can create the AI generated art and then set it up on one of these platforms to be licensed out for a fee, so every sale after you upload it to the platform is purely passive income. You could also use your AI generated art on print-on-demand products and sell it through a platform like Shopify. Here, you could set up a Shopify store with merchandise that is printed with your AI generated art, and then each time a product sells, the print on demand service you are using, like Printful or Printify, would automatically ship the order to your customer and credit you with the sale. 

5 Best AI tools to make money online

1. ChatGPT

ChatGPT is a general purpose generative AI chatbot tool created by OpenAI that can be used in a variety of applications, like creating content, data analysis, and generating pieces of code. Therefore, there are many possibilities to make ChatGPT passive income

2. Jasper AI

Jasper AI is an AI writing tool primarily geared towards content creation for digital marketing purposes, such as blog posts or product descriptions. You can use Jasper AI to create high quality copy for passive income opportunities like affiliate marketing, YouTube automation, and Ecommerce.

3. Midjourney

Midjourney is an AI art generator that is accessed through a bot on the Discord platform. You use text to explain whatever is in your imagination, and Midjourney can bring it to life. Midjourney can also be prompted with images and requested to create an AI version of the image. AI images can be used in a variety of ways to help generate passive income, such as using them in PPC advertising campaigns, thumbnails for a YouTube video, or images for website content. 


DALL-E is text-to-picture AI image generator developed by Open AI. The AI tool excels in generating realistic images from textual prompts. Although the images generated by DALL-E are not quite at Midjourney’s level in terms of resolution, it’s still a great tool for those looking to create more intricate images or different styles. 

5. Pictory AI

Pictory is an AI video generation software that can convert written content into short-form video. This is a useful tool that saves time on passive income opportunities that require social video, such as content for a YouTube automation channel or affiliate marketing through TikTok. 

Related Articles on AI and Automation

  • Ways To Use AI for YouTube Automation - AI offers many applications to automate a YouTube channel. Here are around a dozen ways to use AI to automate a YouTube channel.
  • How To Make Money With ChatGPT - ChatGPT is perhaps the most well known AI tool available today. Here's how you can use it to make money online.
  • Affiliate Marketing Dude Review - In this course review, you'll learn about Marcus Campell's affiliate marketing course and how you can use AI technology like ChatGPT to help rank webpages and generate an audience. 

Conclusion: The most effective method for using AI to generate passive income

AI can help facilitate the generation of passive income for a range of online money-making opportunities. It can help a content creator to create captivating content more efficiently, assist with research and business planning, and be used to analyze data and make highly informed decisions. Considering that AI technologies like ChatGPT have only started to make their way into mainstream use, we're really only at the forefront of what this technology has to offer in terms of passive income generation. 

Of all the available opportunities to create passive income using AI, I believe using AI to rank local lead generation websites is the most effective way to generate passive income online. Local lead generation entails competing against a small and concise portion of the internet because you use local SEO to target specific locations, unlike other options like blogging, YouTube, or Amazon KDP, where you need to compete globally on those respective platforms to get traffic. A local lead generation website can also net you upwards of $3,000 in passive income per month, an amount that is highly unlikely for other potential monthly subscription opportunities, like custom chatbots or data sales, where you'd be lucky to get a few hundred dollars a month in ongoing subscription income.

Local lead generation is also relatively simple. Unlike prompting an AI system to create a mobile app or investment portfolio, which typically requires some level of professional competence, local lead generation is based on the relatively easy-to-learn skill of SEO, which can be learned in a few short weeks, according to SEO Buddy. Therefore, you can use AI to help you earn thousands of dollars in passive income each month with very little skill doing local lead generation. If you want to learn more about creating a passive income stream online with local lead generation, you can check out this local lead generation training, which has helped over 7,000 students achieve greater financial independence. 

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Ippei Kanehara

$52K per month providing lead generation services to small businesses

Ippei.com is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2024, is to build your own lead generation business.

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