OpenAI eyes advertising as new revenue stream amidst rapid growth

OpenAI, the maker of ChatGPT, is considering introducing advertising as a potential revenue stream as it transitions into a for-profit corporation.

Sarah Friar, Chief Financial Officer of OpenAI, shared in an interview with the Financial Times that while the company is evaluating ad models, no immediate plans have been finalized. "We plan to be thoughtful about when and where we implement them [ads]," Friar told FT.

The San Francisco-based AI giant, which recently raised $6.6 billion in funding, has been recruiting advertising talent from major players like Meta and Google, signalling its interest in diversifying revenue streams.

Key hires include Shivakumar Venkataraman, formerly of Google's search advertising team, and Kevin Weil, Chief Product Officer, who brings extensive experience from ad-supported platforms like Instagram.

OpenAI's rise to prominence has been meteoric, with annualized revenues reaching $4 billion thanks to the widespread adoption of ChatGPT, which boasts over 250 million weekly active users.

While Chief Executive Sam Altman is reportedly warming to the idea of advertising, Friar acknowledged the challenges, highlighting that ad-based models could shift focus from user satisfaction to catering to advertisers.

Currently, OpenAI generates significant revenue from its application programming interface (API) and enterprise licensing for ChatGPT.

However, with similar competitors like Perplexity already piloting ad-supported AI search engines, the company may face mounting pressure to explore similar avenues.