Advertisements will roll out in the coming weeks for users logged into the free version of ChatGPT and a newly introduced, budget-friendly $8-a-month “Go” plan, initially launched in India and now making its way to the US, the company announced on Friday. The premium subscription tiers of ChatGPT will remain free of ads.
OpenAI’s choice to incorporate advertising demonstrates a broader initiative to diversify its revenue stream in anticipation of a possible initial public offering, as well as to help mitigate the significant expenses involved in developing and maintaining artificial intelligence systems. The company, which anticipates not being profitable for several years, has pledged approximately $1.4 trillion for data centers and AI chips.
This decision marks a departure for OpenAI, which has largely depended on a subscription-based model. Chief Executive Officer Sam Altman has previously voiced his personal dislike for advertising, viewing it as a “last resort.” He expressed concerns that users might lose trust in a chatbot if they perceive it as promoting products. Competitors like Alphabet Inc.’s Google have also started incorporating ads into their AI offerings.
OpenAI plans to initially test advertisements for sponsored products and services placed at the bottom of relevant responses in ChatGPT, ensuring a clear distinction between the ads and the main content. The company believes these ads could aid users in making informed shopping choices through the chatbot. “Our enterprise and subscription businesses are already robust,” remarked Fidji Simo, OpenAI’s CEO of applications, in a blog entry.
“We support having a diverse revenue model where ads can contribute to making intelligence more available to all.” OpenAI is adopting strategies utilized by other major internet companies, like Meta Platforms Inc. and Google, to subsidize costs by offering targeted ads to a vast audience. With over 800 million weekly users, the ChatGPT creator benefits from a significant user base. Many executives at the company have backgrounds in social media, including Simo, who previously contributed to enhancing Facebook’s advertising efforts before becoming CEO of Instacart.
In the blog, Simo assured that the ads would not sway the responses ChatGPT provides to users. The company stated that it will not share user conversations with advertisers and will refrain from displaying ads on sensitive topics such as mental health and politics to users deemed to be under 18. OpenAI mentioned that it may modify the advertising product based on early feedback.
“As we begin introducing ads, it’s vital that we maintain what makes ChatGPT valuable in the first place,” Simo emphasized. “This means users must trust that ChatGPT’s responses are based on what’s genuinely useful and not influenced by advertising.”
