It's not. He's made videos of their revenue breakdown before and from what I remember AdSense still accounts for ~30% of revenue, which is significant.

E: seems like I was a bit off. AdSense accounted for 18% of their 2021 revenue. Still a significant portion though. 30% might be closer to their 2020 AdSense revenue given the growth of their merch over the last few years.

https://twitter.com/linustech/status/1486918784401088515

I own a small career related channel (135k subs) and adsense account for roughly 5-7% of our revenue. The majority of revenue coming from sponsorships. It depends highly on what niche you are in, as some other channels have much higher % accounting for ad revenue

I think Linus recently mentioned (probably on LAN show) that they are positioned soon to make more money from merchandise than what their YT channel generates - because of their huge drops of the new backpack and screwdriver.

LTT uploaded at least a couple of videos explaining how they make money:

https://youtu.be/-zt57TWkTF4 https://youtu.be/Rh5hL47z2us

I don't think this is true in general. I think it's a lot closer to 50/50 for most. Obviously a lot of variability between channels, but YouTube ad revenue is not trivial.