Soon, ChatGPT may serve ads alongside its AI-powered answers
What's the story
OpenAI, the $150 billion company behind the popular AI chatbot ChatGPT, considering adding advertisements to its platform. The company's CFO, Sarah Friar, hinted at this potential strategy in a recent interview.
The move comes as OpenAI seeks to expand its revenue base and support the continued development of its AI technology.
Friar mentioned that while the company intends to introduce ads thoughtfully, there are no immediate plans to do so, as the current business model is already delivering strong growth.
New recruits
OpenAI's strategic hires hint at ad-focused future
Notably, OpenAI has recently hired a number of high-profile advertising technology professionals.
Among the new recruits are Kevin Weil, who was instrumental in building Instagram's ad platform, and Shivakumar Venkataraman, Google's former head of search advertising.
These strategic hires indicate that OpenAI is gearing up for a possible transition toward an advertising-based revenue model.
Financial performance
OpenAI's revenue and user base continue to grow
OpenAI's annual revenue has hit an estimated $4 billion, thanks largely to ChatGPT's success, which boasts over 250 million weekly active users.
Most of this income comes from licensing its API and ChatGPT subscriptions for individual users and businesses.
However, these revenue streams aren't without challenges, which is why the company is looking at other options such as advertising.
Industry trend
OpenAI's ad strategy amid tech giants' models
The possible pivot toward advertising isn't exclusive to OpenAI. Other tech behemoths like Google and Meta have established lucrative businesses on ad-supported models.
Even smaller rivals like Perplexity, an AI-powered search engine, are testing ads.
The trend highlights the pressure on OpenAI to stay competitive in the fast-paced AI industry.