Introduction to Ads on ChatGPT
OpenAI announced that it will begin testing ads on ChatGPT in the coming weeks, opening the door to another potential revenue stream for the AI company in addition to its subscription-based models. The ads will appear at the bottom of the chat window when there is a relevant sponsored product or service based on the current conversation.
How Ads Will Work
In an example shared by the AI company, a user asks for recommendations for authentic Mexican dishes. ChatGPT responds with ideas for carne asada and pollo al carbon dishes, then links to a food brand that promotes hot sauce. Ads will only be shown to adults using the free version of ChatGPT or ChatGPT Go, a new, low-cost subscription that OpenAI announced. Higher-level subscriptions, including Pro, which now costs $200 a month, do not include advertising.
Ad Testing Phase
When asked how long the ad testing phase will last and whether there are plans to scale ad deployment, an OpenAI spokesperson said: "We will look at early user feedback and quality signals to see if the early tests meet our bar before expanding." The AI company said the ads have no impact on the answers ChatGPT provides and that it will not share conversations users have with the chatbot – or their data – with advertisers.
Revenue Model
The introduction of ads is viewed as a way to make the free and low-cost versions of the chatbot accessible to more users. “Our enterprise and subscription business is already strong and we believe in a diverse revenue model where ads can help make information more accessible to everyone,” OpenAI said. The additional cash flow generated by ads could help ChatGPT invest in its growth and fund ongoing expenses.
Business Strategy
The AI company, which launched ChatGPT in 2022, is valued at $500 billion but has not yet turned a profit. The role of ads in OpenAI’s overall business strategy remains to be seen. CEO Sam Altman previously downplayed the importance of advertising to OpenAI’s revenue stream, saying: “I expect we will try that at some point. I don’t think it’s our biggest revenue opportunity.”
