OpenAI’s ad business has gone from experiment to billion-dollar engine in less than 200 days, giving the AI company a new way to fund its rapid growth.
OpenAI said Monday that ChatGPT Ads reached a $1 billion annualized revenue run rate less than 200 days after launching, giving the company a rapidly growing source of revenue beyond subscriptions and enterprise sales. The figure extrapolates its current monthly ad revenue over a full year rather than representing $1 billion already collected.
The platform is now used by tens of thousands of advertisers and is available in more than 40 countries, according to OpenAI. The company is also expanding self-service advertising through Ads Manager across India, Europe, the Middle East and North Africa.
The milestone comes as OpenAI continues building a broader business around ChatGPT. Its revenue mix includes consumer subscriptions, enterprise products, usage-based APIs and advertising. Ads appear in ChatGPT’s Free and Go tiers. OpenAI said advertising helps support access to ChatGPT, which has more than 1 billion weekly active users.
OpenAI is betting on AI-driven advertising
The appeal for advertisers is straightforward: ChatGPT users often arrive with a specific goal, whether they are researching software, planning a project, learning something or comparing products.
OpenAI says its advertising system can use the context of a current conversation to show relevant ads. Depending on the country and a user’s settings, it may also use information from their broader ChatGPT experience.
The company says ads are clearly labeled and kept separate from ChatGPT’s answers. It also says advertisers cannot access users’ private conversations and that advertising does not influence the answers generated by ChatGPT.
OpenAI has been steadily turning the system into a more conventional performance advertising platform. According to Axios, most campaigns now use cost-per-click or outcome-optimized bidding, while OpenAI has added tools for measurement, targeting and conversion tracking.
Why it matters: The SMB push could widen the market
A major shift came in May, when OpenAI opened Ads Manager to more advertisers. Small and midsized businesses now account for a “material share” of the business, OpenAI said.
That matters because a self-service model can expand an advertising business far beyond large brands and agency relationships. OpenAI has also built a network of more than 50 technology and measurement partners as it strengthens its broader global partnerships strategy. That creates opportunities for agencies, adtech providers and consultants to help clients build campaigns, integrate conversion data and measure performance as ChatGPT develops into a new advertising channel.
The $1 billion run rate is significant, but OpenAI’s ambitions are much larger. Axios reported that OpenAI has told investors it expects to generate $2.5 billion in advertising revenue this year and is targeting $100 billion by 2030.
That makes ChatGPT Ads more than a new monetization experiment. It could become a central part of how OpenAI funds access to its services, particularly its free offering.
OpenAI says its next phase will add more markets, ad formats, campaign objectives, buying options and measurement tools. It also plans to explore ways for businesses to interact with consumers more naturally inside ChatGPT. That could make ChatGPT a major new advertising channel, but its long-term success may depend less on how quickly OpenAI sells ads than on whether users continue to trust the answers surrounding them.
Read more: OpenAI is also expanding its channel footprint through a partnership with Sophos designed to bring its AI technology to MSPs and their customers.