OpenAI to test ads inside ChatGPT

OpenAI is introducing advertisements into its ChatGPT platform, a significant strategic pivot driven by the company's substantial financial burn rate and an increasingly competitive AI landscape. This move, initially targeting free and low-cost tiers, marks a departure from earlier statements by CEO Sam Altman, who once viewed advertising as a "last resort".

The Shift to an Ad-Supported Model

Starting with users in the US, OpenAI will begin testing ads for those on the free ChatGPT tier and the new, budget-friendly ChatGPT Go plan, priced at $8 a month. These advertisements will appear subtly at the bottom of responses when a sponsored product or service aligns with the conversation's context. Importantly, they will be clearly labelled to distinguish them from AI-generated content. Premium subscribers, including those on Plus, Pro, Business, and Enterprise plans, will remain ad-free.

OpenAI has outlined strict guidelines for this new revenue stream. The company assures users that ads will not influence the AI's responses, and conversations will remain private, never shared with advertisers. Users will also retain control over ad personalisation, with the option to disable it entirely. Furthermore, ads won't be shown to users under 18 or alongside sensitive topics such as health, mental health, or politics. This approach aims to fund the free and low-cost usage tiers without compromising user trust, a critical factor for any platform, especially one handling potentially sensitive queries. Interestingly, the company states it's "not optimising for time spent on ChatGPT", suggesting a focus on targeted, less intrusive advertising.

Financial Pressures and Market Dynamics

This strategic shift comes as OpenAI grapples with considerable financial challenges. Reports indicate the company anticipates a staggering $17 billion cash burn in 2026, a substantial increase from $9 billion in 2025. Projections suggest that positive cash flow may not be achieved until 2029 or 2030. Advertising is expected to generate an estimated $1 billion in revenue in 2026, potentially soaring to $25 billion by 2029. This is crucial given that approximately 95% of ChatGPT users currently do not generate direct revenue for the company.

The AI market is also becoming fiercely competitive. Data from Similarweb highlights a significant shift, with Google's Gemini rapidly increasing its market share from 5.7% to 21.5% over the past year. During the same period, ChatGPT's share has decreased from 86% to 64%. This dynamic underscores the urgent need for OpenAI to diversify its revenue streams and maintain its competitive edge, particularly as rivals like Anthropic also scale up their offerings and unveil new AI agents. The timing of the advertising announcement coincided with the global rollout of ChatGPT Go, making the service available in over 170 countries at localised prices, demonstrating a clear push for broader user acquisition and monetisation. This competitive pressure isn't unique to large-scale models; even niche tools are seeing rapid growth, as evidenced by DeepSeek's user surge.

Broader Implications for AI Monetisation

OpenAI's move into advertising reflects a wider industry trend where AI companies are exploring various monetisation strategies beyond direct subscriptions. This includes licensing agreements, enterprise solutions, and now, ad-supported models for wider accessibility. For more on the economic realities facing large tech companies, a report from The Information provides detailed insights into OpenAI's financial projections. As AI continues to integrate into daily life, understanding how these powerful tools will be funded becomes paramount. Companies like Samsung are already vowing AI integration across all devices in 2026, suggesting a future where AI features are ubiquitous, and their underlying business models, including advertising, will be a critical component.

Do you think this advertising model is sustainable for OpenAI, or will it alienate users? Share your thoughts below.