OpenAI Explores Advertising for ChatGPT Amid Financial Pressures

OpenAI is definitely, maybe thinking about ads for ChatGPT

Chief Financial Officer Sarah Friar told the Financial Times on Monday that the AI company was considering an ad model, adding that it plans to be "thoughtful about when and where we implement them." However, Friar backtracked a little in a follow-up statement to the outlet, saying "while we're open to exploring other revenue streams in the future, we have no active plans to pursue advertising." This is in line with what OpenAI told Mashable when it launched ChatGPT Search at the end of October. When asked whether the company planned on introducing ads to the AI-powered search engine, a spokesperson said, "we don't have any plans for ads." That said, OpenAI has been hiring lots of top monetization talent lately. Shivakumar Venkataraman, formerly on Google Search's advertising team, became an OpenAI VP in May, and Chief Product Officer Kevin Weil who led product teams at Instagram and X came on board in June. On Tuesday, OpenAI hired its first Chief Marketing Officer Kate Rouch, who oversaw Coinbase's Super Bowl ads. OpenAI recently closed a massive funding round of $6 billion, giving the company a valuation of $150 billon. According to the New York Times, OpenAI's revenue projections underpinning the largest VC round of all time expect to bring in $11.6 billion in 2025. This is despite the fact that OpenAI currently operates at a loss of $2.3 billon. So somehow OpenAI has to essentially triple its revenue despite the huge cost of maintaining and developing AI models. That money has to come from somewhere, and upping its premium subscriptions might not be enough. Of course bringing ads to ChatGPT risks enshittifying the product and alienating users. This could be costly in a highly competitive environment with Anthropic, Perplexity, and Google Gemini developing similar tools.

ChatGPT With Ads? OpenAI Explores New Business Model to Cover Its High Costs

ChatGPT's minimalist style is part of its appeal. Invasive ads do not crowd out your queries, but that might change as OpenAI looks to generate more revenue. The company is considering an ad-based model, OpenAI CFO Sarah Friar told the Financial Times. But she stressed that the company will be "thoughtful about when and where we implement" the ads. Perhaps fearing backlash, Friar issued a statement after the interview: "While we're open to exploring other revenue streams in the future, we have no active plans to pursue advertising." OpenAI mainly earns money through its paid ChatGPT Plus tier and its API, which lets third-party developers build apps around the company's AI products. But despite a projected $3.7 billion in sales for 2024, OpenAI might burn through an estimated $5 billion in cash this year thanks to server costs and paying the hefty salaries of its employees. The company is also restructuring to become a for-profit company and venturing into online search. The FT adds that OpenAI has hired advertising talent from top tech firms, including Meta and Google. So it may only be a matter of time before ads debut on ChatGPT. On the downside, any expansion into ads will raise questions about privacy since companies often collect and mine user details to power targeted advertising. In the meantime, Friar added in her statement: "Our current business is experiencing rapid growth, and we see significant opportunities within our existing business model."

OpenAI Said to Be Considering Displaying Ads on ChatGPT

OpenAI is reportedly looking at ads as a way to create a new revenue source. As per a report, the AI firm is considering showing ads on ChatGPT, the company's AI-powered chatbot platform. However, it is said that there is no decision on when or how these ads could be displayed. One speculation is that the ads could be shown to the free users of ChatGPT, however, the company could also take a route similar to Perplexity, which is testing showing ads to all users. According to a Financial Times report, the AI firm is looking at ads on ChatGPT as a viable option to generate a boost to its revenue. Sarah Friar, the Chief Financial Officer of OpenAI, told the publication in an interview that the company was considering creating an ad-based revenue model, but also added that the idea was to be "thoughtful about when and where we implement them." The report added that Friar also issued a statement after the interview where the CFO highlighted that OpenAI's existing business models were witnessing accelerated growth and the focus was to tap into the opportunities within them. "While we're open to exploring other revenue streams in the future, we have no active plans to pursue advertising," Friar told the Financial Times. Despite contradicting comments on the topic, the CFO did not outright rule out the decision to show ads on ChatGPT in the future. The report also claimed, citing unnamed people familiar with the matter, that OpenAI has been hiring people specialising in advertising from rivals such as Meta and Google. Ad-based revenue models are also easy to deploy and earn from. Recently, Perplexity has also been testing showing ads on its platform as sponsored content. While the project is in its pilot phase and is only shown in the US, it is likely to be expanded to other regions. Google has also began showing ads on AI Overviews, the AI-generated summaries that show on its Search platform. However, OpenAI has also been exploring other avenues to generate revenue. Earlier this year, it partnered with Apple to integrate ChatGPT with the tech giant's operating systems. The AI firm has also recently launched its AI-powered search engine and is reportedly planning to release AI agents and the Sora video model.

Despite Sam Altman's Skepticism Over An Advertising Monetization Model, OpenAI Is Considering Bringing Ads To ChatGPT

OpenAI has massively grown in the field of AI and keeps evolving its technology by constantly bringing new innovations and thinking of more categories to establish itself in. The company was initially a non-profit organization with a vision to work for the betterment of society by leveraging its technology, but that is going to change with the company heading to shift to a fully for-profit organization. It looks like the company keeps on considering new possibilities, with the idea of ads being incorporated into ChatGPT under consideration. OpenAI is actively working towards a structural shift by transitioning to a profit-driven company, with many trying to bring a halt to this change. It looks like the company is not scared to try different strategies that might take it to new heights. According to the Financial Times, it is considering an advertising business model amidst growing financial costs. It was the company's CFO, Sarah Friar, who revealed that the plans to incorporate ads into ChatGPT were being considered, although it was emphasized that much thought would be put into the ad placement and how the ads would appear. This was followed by another follow-up statement where Friar shared that currently, no active plans to bring this idea forward are being pursued. This news report comes after Shivakumar Venkataraman, a former Google executive, joined OpenAI and is known for his extensive experience in the ad domain. This concept might be on the table due to his suggestions or could be a step towards monetizing its AI technologies. OpenAI has primarily relied on a subscription-based model to help fund its AI initiatives along with enterprise partnerships. However, the growing cost of the development of these models makes it difficult to sustain them for an indefinite time. While it has secured funding from big investors, including Microsoft, for a diversified revenue stream, it does make sense for the company to be exploring other options in order to sustain itself financially. If the financial reality is kept in view, OpenAI considering opting for an advertising monetization model as a viable option, but Sam Altman has expressed his skepticism over it and even went on to share his unease at Harvard Business School. He expressed his perspective that AI-generated content and advertising do not go together and would raise serious concerns. Altman believes the move should be a last resort, given how it could erode user trust. OpenAI is left with the dilemma of succumbing to financial pressures or reconciling with its ethical aspirations.

It Sounds an Awful Lot Like OpenAI Is Adding Ads to ChatGPT

They're not copping to much yet, but recent hiring activity and wishy-washy statements make it seem an awful lot like OpenAI is planning to introduce ads into its suite of products like ChatGPT. As the Financial Times reports, the company is hiring ad talent away from its big tech rivals like Google and Meta. And ad-oriented job listings at the company that the FT spotted on LinkedIn offer a similar sense. So far, even the free versions of OpenAI's products have remained ad-free. Of course, the company is currently swimming in money -- in the two years since its flagship chatbot dropped, OpenAI's valuation skyrocketed to $157 billion -- but amid reports of shrinking traffic and the extremely expensive nature of AI infrastructure, it may well be starting to feel the squeeze. If it did start to put ads into ChatGPT, the formerly nonprofit OpenAI would be crossing a Rubicon of sleaziness; the obvious integration would be to jump on users asking things like "best air fryer" and then pointing them toward companies paying OpenAI for publicity, undermining the entire premise of an intelligent and objective AI-powered assistant. In an interview with the FT, chief financial officer Sarah Friar candidly said the company had been weighing an ads model, though she declined to say when or where such ads would be released besides saying the company would be "thoughtful about when and where we implement them." A former mover and shaker for the likes of Nextdoor and Salesforce, Friar went on to point out that she and OpenAI chief product officer Kevin Weil -- who previously helmed ad-supported projects at Instagram and Twitter -- have a ton of ad experience. "The good news with Kevin Weil at the wheel with product is that he came from Instagram," she told the outlet. "He knows how this works." Following the interview, however, Friar backtracked with an unconvincing reversal. "Our current business is experiencing rapid growth and we see significant opportunities within our existing business model," she told the FT. "While we're open to exploring other revenue streams in the future, we have no active plans to pursue advertising." As of now, of course, there's no confirmation of anything except internal talks about introducing ads into OpenAI products. Reading between the lines, however, it seems like the firm doing a bit more than brainstorming -- and that after-interview reversal makes the whole thing seem all the more likely to happen.

Is OpenAI Getting Into the Advertising Business? The Company Is Sending Mixed Messages

OpenAI, maker of the mega-popular ChatGPT, is considering introducing advertising to its growing suite of products, according to an interview with the AI market leader's chief financial officer. In an interview with the Financial Times, OpenAI CFO Sarah Friar said that the company has been discussing how an advertising model would work in their ecosystem, with much thought placed on "when and where we implement" ads. (In a later statement, though, Friar claimed OpenAI isn't making any active plans in the ad space.) While Friar didn't provide specifics about how OpenAI could introduce advertising, other AI startups' approaches could give a hint. AI search engine Perplexity recently began experimenting with "sponsored follow-up questions," meaning if you were to search "help me find a job" for example, the chatbot could suggest that you next ask it: "How can I use Indeed to enhance my job search?" Friar says OpenAI's approach to advertising will be aided by chief product officer Kevin Weil, who previously developed hugely successful advertising operations as the head of Instagram and Twitter's product teams. According to the FT's sources, OpenAI's leaders are divided on how to implement an ad product, but CEO and cofounder Sam Altman is reportedly warming up to the idea.

ChatGPT may show ads to non-paying users in the future

ChatGPT, OpenAI's popular chatbot, is free to use despite having a paid version with more features. Currently, even the free version is ad-free, but this may change in the future as the company behind the platform aims to increase its profits. In an interview with the Financial Times, OpenAI CFO Sarah Friar didn't rule out the possibility of showing ads to non-paying ChatGPT users in the future, although the company has many concerns about doing so. The executive sees ads as a way to increase profits, as the cost of keeping AI servers running is high. Although OpenAI is currently valued at more than $150 billion, the company is said to have burned $5 billion this year on AI training. Selling ad slots on ChatGPT would be a way to monetize the platform and keep it available to free users. Earlier this year, OpenAI hired multiple advertising talents from Meta and Google, corroborating the company's plans. However, Friar says that OpenAI needs to be "thoughtful about when and where" ads will be implemented. She also suggested that this won't happen in the near future. While the report says that OpenAI CEO Sam Altman is "warming up to the idea," Altman has said in the past that he "doesn't like them [ads] in general" and that he sees ads as a "last resort." OpenAI currently charges $20 per month for ChatGPT Plus, a more advanced version of the chatbot that provides access to the latest language models, a higher message limit, and image generation. The company also has special subscription plans for teams and businesses. Earlier this year, Apple partnered with OpenAI to integrate ChatGPT into Siri (a feature coming soon with iOS 18.2). Although sources say Apple didn't pay for the deal, the company will promote the ChatGPT Plus subscription right from the iOS Settings app, which should boost subscriptions once the update is available to iPhone and iPad users. The iOS 18.2 update with ChatGPT integration will be released to the public later this month.

Circle of life: ChatGPT could Google-ify its search results with... ads

If it decides to pursue ads, OpenAI plans to be thoughtful about their location and how it executes the integration. As OpenAI transitions from a nonprofit to a for-profit business, it's exploring new ways to boost its revenue. Currently, the company generates profit from the API it provides to developers, in addition to ChatGPT's paid individual and enterprise plans, which start at $20 per month. Nevertheless, millions rely on the AI chatbot for free, and OpenAI aims to monetize its large user base. In a recent interview, the company revealed it's considering bringing ads to ChatGPT.

OpenAI explores advertising as it steps up revenue drive

OpenAI is discussing plans to introduce advertising to its artificial intelligence products, as the ChatGPT maker seeks new revenue sources as it restructures as a for-profit company. Sarah Friar, chief financial officer at OpenAI, told the Financial Times in an interview that the $150bn AI start-up was weighing up an ads model, adding that it planned to be "thoughtful about when and where we implement them [ads]". The San Francisco-based group, which in October secured $6.6bn in new funding, has been hiring advertising talent from big tech rivals such as Meta and Google, according to multiple people familiar with the matter and an FT analysis of LinkedIn accounts. In a statement following the interview, Friar added: "Our current business is experiencing rapid growth and we see significant opportunities within our existing business model. While we're open to exploring other revenue streams in the future, we have no active plans to pursue advertising." OpenAI is stepping up efforts to generate revenue from its products, such as its AI-powered search engine, as it seeks to capitalise on its early lead in the booming AI sector. Its smaller rival Perplexity is already piloting advertising in its AI-powered search engine. Friar, who previously held leadership roles at companies such as Nextdoor, Square and Salesforce, pointed to the wealth of advertising experience between herself and Kevin Weil, the company's chief product officer. Weil was previously responsible for building out ad-supported products at major tech platforms including Instagram and X. "The good news with Kevin Weil at the wheel with product is that he came from Instagram. He knows how this [introducing ads] works," said Friar. In May OpenAI also hired Shivakumar Venkataraman, who previously led Google's search advertising team, as vice-president. Advertising has been a highly successful route for big tech companies such as Google and Meta to monetise their huge online audiences. But OpenAI executives are divided on what advertising might look like on their platform, according to two people with knowledge of the discussions. Chief executive Sam Altman is warming up to the idea, according to a person familiar with his thinking. The fast-growing group, which is now one of Silicon Valley's most valuable private companies with a $150bn valuation, is in the midst of restructuring as a for-profit corporation. The steep costs of training new models means AI start-ups including OpenAI, Anthropic and Elon Musk's xAI are looking for new ways to commercialise their technology and are engaged in frequent fundraising efforts. OpenAI's revenues have surged to about $4bn on an annualised basis thanks to the runaway success of ChatGPT, putting it among the fastest-growing start-ups of all time. The chat bot, which launched two years ago, has grown to more than 250mn weekly active users. But the massive costs associated with developing "frontier" AI models mean OpenAI anticipates burning through considerably more than the company is spending each year in the near-term. It is on track to burn through more than $5bn of cash. One of OpenAI's largest sources of revenue comes from access to its application programming interface (API), which enables businesses and developers to build with its technology, as well as by selling individual and enterprise licences of ChatGPT. "They are pursuing consumer productivity and consumer search. The API is not a high margin business," the person added. Friar pointed out that ad models come with drawbacks, including the fact they are sensitive to swings in the broader economic cycle, and that they tend to shift a company's focus from pleasing their users to their advertisers. "I don't preclude [ads]," she said. "But for now there's lots of low hanging fruit in the way we are doing things."

ChatGPT could soon get ads -- here's what we know

ChatGPT could soon change forever, at least to the free version of the AI platform. That is according to one of the leading heads of Open AI, who recently made a statement regarding the future of ChatGPT, primarily regarding revenue sourcing. One of the major points of contention for many people is the increase in ads. We have seen the number of ads on YouTube increase, while at the same time clamping down on adblockers. We have also seen an increase in apps that simply bombard the user with ads. However, while ads might be annoying, they are a proven source of revenue, which is why OpenAI is considering the option. In a recent interview with the Financial Times, Open AI's chief financial officer Sarah Friar stated that the company was weighing up the options. Friar goes on to state, "Our current business is experiencing rapid growth and we see significant opportunities within our existing business model. While we're open to exploring other revenue streams in the future, we have no active plans to pursue advertising." Considering OpenAI's CEO generally dislikes ads it is surprising to see this option being considered. However, Friar does state in the interview that if Open AI goes ahead with the plan then it will carefully consider when and where it places ads. However, it's worth noting that, according to Android Authority, OpenAI is hiring advertising talents from Meta and Google which indicates that plans are in motion. Tom's Guide AI Editor Ryan Morrison put this move into context: "The free version of ChatGPT has been getting more of the features previously only available to people paying $20 per month for Plus. This includes Advanced Voice mode and search. The latter is particularly important as OpenAI tries to take on Google in its largest business area but running AI models isn't cheap, so ad revenue could help to offset the cost while still keeping features freely available." The company could soon see an increase in subscribers thanks to Apple. In an upcoming update for iOS 18 will reportedly begin to promote ChatGPT Premium in the Apple settings app. There is also rumor circulating that Open AI is considering higher-priced subscription tiers in the future. If Open AI can integrate ads well enough that they aren't a hindrance then I see no issue with the idea. However, if you find the idea to be deplorable then we have a list of some of the best ChatGPT alternatives. More from Tom's Guide

OpenAI weighs advertisement model as costs rise, but no active plans yet: report

OpenAI's costs are expected to exceed $5 billion annually. This includes training and deployment of generative AI tools like ChatGPT. The current revenue streams generate approximately $4 billion annually but leave thin margins on API services.OpenAI, valued at $150 billion, is exploring the possibility of introducing advertisements to its artificial intelligence products, marking a potential shift in its monetisation strategy. The development was first reported by the Financial Times (FT), which highlighted comments from OpenAI's chief financial officer Sarah Friar. The company intends to be "thoughtful about when and where we implement them (advertisements)," Friar told FT in an interview. However, in a follow-up statement, she clarified, "There are no active plans to pursue advertising" at this stage, though the discussions signal an openness to the model. OpenAI recently appointed Shivakumar Venkataraman, Google's former head of search advertising, as vice president. Additionally, Kevin Weil, OpenAI's chief product officer, who previously led Instagram's ad platform, is leveraging his expertise to guide potential strategies. Despite its reliance on subscription models and API licensing, OpenAI is facing mounting costs, estimated to exceed $5 billion annually. This includes the expensive training and deployment of generative AI tools like ChatGPT, which boasts over 250 million weekly active users. Current revenue streams, including enterprise and individual subscriptions, generate approximately $4 billion annually but leave thin margins on API services. OpenAI's CEO Sam Altman expressed reservations about ads during a recent fireside chat at Harvard Business School. When asked about adopting ads, Altman remarked, "It would be a last resort... I think that ads-plus-AI is sort of uniquely unsettling to me." However, the financial pressures of maintaining its rapid growth may necessitate a reconsideration of this stance. FT also noted the rising trend of ad-supported AI models, with competitors such as Perplexity already piloting advertisements. The report emphasised the tension within OpenAI about the integration of ads, with some executives viewing it as an inevitable evolution and others wary of its implications for user focus and economic dependence. For now, OpenAI continues to expand its subscription-based offerings and partnerships, maintaining a cautious approach as it navigates the challenges of scaling its ambitious operations.

OpenAI denies it is building ad biz model into its platform

Chief financial officer admits 'we're open to exploring other revenue streams in the future' OpenAI has ruled out running adverts on its platforms, for now at least, Chief Financial Officer Sarah Friar has told The Register. While distasteful for users accustomed to the lofty ideals espoused by OpenAI during its early years, the move would make sense, considering reports the AI developer is trying to restructure as a for-profit entity. There are paying subscribers to its services, yet given OpenAI's dominance in the generative artificial intelligence space, adding ads to some of its services may be tempting to the corporation's commercial strategists. "Our current business is experiencing rapid growth, and we see significant opportunities within our existing business model. While we're open to exploring other revenue streams in the future, we have no active plans to pursue advertising," Friar told us in a statement. This is somewhat different to previous comments from Friar reported by the Financial Times earlier today, with the CFO telling the newspaper that OpenAI would be "thoughtful about when and where we implement them [advertisements]." Given investments in OpenAI, said to value the company at $157 billion, it is difficult to imagine the biz not thinking about ways of upping its top line. Google, for example, generates the lion share of its money from ads, and, considering the reach of the OpenAI's ChatGPT bot and introduction of the SearchGPT AI search engine, bolstering the company's income with an ad model would seem logical, albeit unwelcome by users unaccustomed to it. While Friar said there were no active plans, OpenAI has hired individuals with marketing skills and experience in building ad platforms. Kevin Weil was appointed Chief Product Officer in June 2024, after working on product and marketing for both Instagram and Twitter. Shivakumar Venkataraman joined as VP in May 2024 having spent more than 20 years at Google, including a lengthy stint working on ads in the company's services. OpenAI has shed several high-profile staffers in recent months. The CTO, Mira Murati, announced her departure in September 2024, along with two other execs, Bob McGrew and Barret Zoph. Sam Alton, temporarily ousted as CEO in November 2023, is now one of the last two remaning founders at the business. Back in September, Gartner analyst Jason Wong told The Register: "It's clear with the departures of the co-founders, and high-profile engineering leaders, that OpenAI is being remade with Sam's vision. His manifesto and the shift to a for-profit entity also reinforces his vision for the business." OpenAI continues to burn through investor cash as it builds AI models. This approach is not compatible with a for-profit model, and investors will want a return on their investment at some point, even if Elon Musk is taking steps to stop OpenAI moving toward an entirely for-profit business. ®

OpenAI Reportedly Weighing the Addition of Ads to AI Products | PYMNTS.com

Will OpenAI combine advertising with its artificial intelligence (AI) offerings? It's something the company is considering as it searches for new revenue streams, Chief Financial Officer Sarah Friar told the Financial Times (FT) in an interview published Monday (Dec. 2). Friar said the tech startup is considering an advertising model, adding that its goal for ads was to be "thoughtful about when and where we implement them." Weil oversaw the creation of ad-supported products at tech platforms such as Instagram and X. "The good news with Kevin Weil at the wheel with product is that he came from Instagram. He knows how this [introducing ads] works," said Friar. However, Friar later clarified the company's advertising plans in a statement to the FT after the interview: "Our current business is experiencing rapid growth and we see significant opportunities within our existing business model. While we're open to exploring other revenue streams in the future, we have no active plans to pursue advertising." The FT report notes that OpenAI is increasing efforts to pull revenue from products like its AI-powered search engine to capitalize on its dominant position in the AI sector. A smaller competitor, Perplexity, has begun piloting advertising in its AI-powered search engine. Speaking with PYMNTS soon after Perplexity's plans were reported in August, Caitlin Halpert, vice president of growth at marketing agency Journey Further, said that AI platforms could seamlessly integrate ads without sacrificing user experience. "I can see ads blending in nicely with how the platform works today," Halpert said, noting that ads could appear alongside source documents in Perplexity's interface, while also warning of potential difficulties. "The primary challenge will likely be ensuring users can clearly distinguish between ads and legitimate sources, maintaining the integrity of the search experience," she said. Bringing ads to AI search platforms could transform competition in the digital advertising market. Halpert said advertisers should work on adapting their strategies, stressing the need to "prioritize earned media coverage and create content that deeply resonates with users, rather than merely optimizing for algorithms."