OpenAI is actively planning the commercialization of advertisements for its flagship product, ChatGPT, aiming to monetize its massive user base of nearly 900 million. According to informed sources, internal discussions have taken place regarding adjustments to the AI model to prioritize sponsored content, and various ad formats, including sidebar advertisements, have been prototyped internally. If implemented, this move would pose a potential challenge to the trillion-dollar digital advertising market dominated by Google and Meta.
OpenAI is quietly exploring new commercialization avenues for its flagship product, ChatGPT, planning to introduce advertisements as a means of generating additional revenue. This move could reshape the trillion-dollar digital advertising market currently dominated by $Alphabet-A (GOOGL.US)$ and $Meta Platforms (META.US)$ , altering the landscape of the industry.
On December 24, according to The Information citing sources familiar with the matter, OpenAI has internally discussed adjusting its AI models to prioritize sponsored content and has begun developing internal prototypes for how advertisements might be displayed within ChatGPT. This marks the company's entry into detailed planning stages in exploring advertising business opportunities.
Among the proposed options under discussion is the prioritization of sponsored content in ChatGPT’s responses when users make relevant queries. Internal prototypes developed in recent weeks showcase various ad display formats, such as showing sponsored information in a sidebar next to the main response window. This initiative aims to convert ChatGPT’s massive user traffic into direct revenue, thereby challenging the market dominance of existing digital advertising giants.
An OpenAI spokesperson responded by stating: "As ChatGPT becomes increasingly powerful and widespread, we are looking for ways to continue providing more intelligence to everyone. As part of this effort, we are exploring what advertisements within our product might look like." The spokesperson emphasized that any approach would be premised on maintaining user trust in ChatGPT.
New Type of Advertising: Seeking Seamless Integration
Unlike simply replicating existing advertising models used in social media or search engines, OpenAI aims to create a new form of digital advertising. According to a source familiar with the related efforts, the company intends to leverage the vast amount of interest data collected from users' detailed interactions to display highly intent-relevant advertisements.
A central focus of internal discussions has been how to present advertisements without undermining user experience and trust. Proposed solutions lean toward 'non-intrusive' ads, ensuring that users do not feel overwhelmed by sponsored content during their conversations. For instance, advertisements may only appear after a user’s dialogue reaches a specific stage.
One internal prototype demonstrated this concept: When a user asks ChatGPT to plan an itinerary for a trip to Barcelona, the chatbot might recommend the Sagrada Familia. While this recommendation itself is not sponsored, clicking on a related link for more information could trigger a pop-up window displaying links from multiple paid travel service providers.
Monetization Pressure and Market Opportunity
Behind the exploration of advertising lies OpenAI’s significant pressure to monetize and its ambitious commercial vision. Since its launch in 2022, ChatGPT’s weekly active users have surged to nearly 900 million; however, as of October this year, only about 5% of them were paying subscribers at either $20 or $200 per month.
Introducing advertisements will generate significant revenue from the vast base of free users. According to OpenAI’s projections earlier this year, the average annual revenue per user from 'monetizing free users' is expected to be $2 starting next year and increase to $15 by 2030. The company anticipates that total revenue from non-paying users will reach approximately $110 billion by 2030, with gross margins comparable to Meta Platforms’ Facebook, ranging between 80% and 85%.
This initiative will position OpenAI directly within the global digital advertising market led by Google, Meta Platforms, and $Amazon (AMZN.US)$ . According to data from the advertising research firm WARC, these three companies account for approximately 60% of the global market share (excluding China) and are projected to generate nearly USD 560 billion in total advertising revenue this year. Michael Morton, an e-commerce analyst at MoffettNathanson, stated that ChatGPT's conversational format effectively captures user attention, “making it an advertising platform with tremendous potential.”
Balancing Trust and Commercialization
For OpenAI, advertising has always been a sensitive topic. Internally, there are concerns that it could undermine user trust in its responses, and some employees believe commercial advertisements conflict with the company’s broader goal of achieving Artificial General Intelligence (AGI). Last May, CEO Sam Altman stated that advertising would be “a last resort.”
However, over time, Altman’s stance has softened. In a podcast this October, he remarked, “I find ads somewhat annoying, but not entirely unfeasible.” This shift reflects the company’s balancing act between sustaining high operational costs and seeking a sustainable business model.
Paving the Way for E-commerce, Advertising Still in Early Stages
Although discussions about the advertising business are ongoing, OpenAI’s actions suggest that it is still laying the groundwork for commercialization. The company has incrementally added shopping features to ChatGPT, including a checkout function built in collaboration with payment processing company Stripe, as well as partnerships with Shopify, Zillow, and DoorDash to integrate e-commerce, real estate, and food delivery services into the chat experience.
These e-commerce functionalities not only cultivate users’ AI shopping habits but also provide OpenAI with up-to-date merchant data, which is critical for the precise targeting and performance tracking of future advertisements.
Nevertheless, OpenAI’s advertising business remains in a very early stage. According to a report by The Information, an internal “code red” incident prioritized improvements to ChatGPT’s core functions, delaying work related to advertising. Meanwhile, although advertisers and brands are highly interested in placing ads on ChatGPT, five senior advertising and brand marketing executives revealed that they have yet to receive any specific information about paid advertisements from OpenAI.
Editor/KOKO