ChatGPT will soon show ads alongside chats, OpenAI announced Friday.
Why it matters: The party's over. The company behind the world's most popular chatbot needs to make money.
OpenAI will begin testing advertising on its free and $8 per month Go tier in the U.S. in the coming weeks.
How it works: ChatGPT's responses won't be influenced by advertisers, OpenAI says. But ads will be influenced by conversations.
- Personalization will be on by default, with an opt-out.
- Ads will be separated from chats and labeled "Sponsored."
- OpenAI says conversations will be kept private and data will not be sold to advertisers.
Between the lines: Ads in chatbots were always inevitable — and concerning, given how much sensitive personal and emotional information people share with ChatGPT and other bots.
Follow the money: OpenAI told investors in September that it could burn up to $115 billion in cash by 2030, per The Information. The company plans to spend at least $1.4 trillion on data centers and other tech infrastructure — but hadn't previously revealed how it plans to make money.
- Last year, OpenAI hired Instacart CEO Fidji Simo as CEO of applications, who was tasked with hiring someone to oversee monetization efforts. The company poached Slack CEO Denise Dresser to be its chief revenue officer in December.
Zoom out: Unlike its fiercest consumer rivals — Google, Meta, Amazon, xAI — OpenAI doesn't have other products or surfaces where it can feed users ads.
- But Google too has been experimenting with AI advertising. While Google exec Dan Taylor told Business Insider there are "no plans for ads in the Gemini app," Google has introduced ads in AI Overviews and AI Mode.
Our thought bubble: Advertising splits OpenAI's incentives between serving the user and pleasing advertisers, a chasm that could grow over time.
- History suggests that guardrails around ad targeting often loosen as revenue pressure grows.
What they're saying: The move to start advertising on the platform, the company says, is an effort to give more people access to ChatGPT.
- "Our mission is to ensure AGI benefits all of humanity; our pursuit of advertising is always in support of that mission and making AI more accessible," the company said in a blog post Friday.
- "Answers are optimized based on what's most helpful to you."
Don't want ads? Pay up. OpenAI says it will always offer an ad-free option.
- Plus ($20/month), Pro ($200/month) and Enterprise plans will not include ads.
- ChatGPT Go will include ads.
What's next: To start, the company will test ads below an answer to a prompt. But those lines could blur quickly.
- OpenAI says users may soon be able to ask ChatGPT questions about an ad to help make purchase decisions.
The bottom line: There's no such thing as a free lunch.
