OpenAI Changes Narrative With Ads Push

Talk about taking control of the narrative. OpenAI’s announcements today that it would start testing ads in ChatGPT, and that it would also introduce an $8 a month tier of service called ChatGPT Go in the U.S., gives the AI company something positive to talk to investors about as it tries to raise a gargantuan amount of money (up to $100 billion at a valuation of $750 billion at last report). That will be a change after months of chatter about how Google was catching up to OpenAI on various fronts, both technologically and with partners such as Apple. Even better, OpenAI’s two initiatives should start to beef up its top line, offering a way to trim the bottom-line losses at some point this century. Offering ads also ensures OpenAI doesn't leave that market wide open to Google, which has already taken steps to sell ads in its AI chatbot.

The idea of ads in ChatGPT has long been in the cards—the vast majority of the chatbot’s nearly 900 million weekly active users don’t subscribe to ChatGPT's paying tiers, which makes selling ads the obvious way for the company to make real money. As we’ve reported, OpenAI has projected it will generate revenue totalling $110 billion through 2030 off the cheapskates who don’t pay, a number that presumably includes shopping-related revenue as well as ads. But let’s not get ahead of ourselves. Ad businesses tend to take a long time to build up. Netflix is the most recent example of that. It introduced ads on one tier of its service in late 2022, and its 2026 ad revenue in the U.S.—where most of the world’s ad dollars come from—is projected to be only $3.26 billion, according to an eMarketer report earlier this week. That’s not a lot: Meta’s ad revenue last quarter was $50 billion.