OpenAI Says Ad Business Reaches $1 Billion Run Rate

OpenAI says its ChatGPT Ads business has reached $1 billion in annualized revenue run rate.

“The platform is now used by tens of thousands of advertisers and continues to expand globally,” the artificial intelligence (AI) startup announced Monday (Aug. 31). “Starting later today, advertisers can purchase ChatGPT ads directly via Ads Manager across India, Europe, the Middle East, and North Africa.”

OpenAI in April told investors it expected its ad business to bring in $2.5 billion in revenue this year before jumping to $100 billion by the end of the decade.

Earlier this month, OpenAI said it was on track to bring in annualized revenue of more than $40 billion, around double its run rate from the end of last year.

“The jump gives the ChatGPT maker fresh momentum as it prepares to go public,” PYMNTS wrote at the time. “For the banking, payments and FinTech firms watching how AI vendors turn usage into money, the number signals that enterprise demand for AI tools keeps climbing even as the cost of building them stays high.”

The company said Monday that its customer base for the 200-day-old ad business is becoming “increasingly global,” with advertisers outside the U.S. representing a growing percentage of revenue. Many of OpenAI’s largest customers are using ChatGPT Ads to target audiences across multiple markets.

“Our advertiser base is broadening as well. We began with a managed-sales, agency, and partner-led model,” the release added. “Since then, we have expanded our ecosystem to more than 50 technology and measurement partners.”

The company noted that ads in ChatGPT are always clearly labeled and separate from the chatbot’s answers. Ads do not influence those answers, and advertisers cannot access people’s private conversations, the company added.

PYMNTS wrote earlier this summer about the success of OpenAI’s ad platform against the backdrop of the company’s shortlived ChatGPT Instant Checkout feature.

That service, which let users complete purchases directly inside the chat without visiting a retailer’s website, launched in September of last year and was shelved six months later.

“Instant Checkout’s failure does not mean ChatGPT lacks value for retailers. It means the platform may be more effective at influencing a purchase than completing one,” that report said. “Consumers are already using ChatGPT to research products, compare options and narrow decisions, while AI-referred traffic converts at higher rates and produces larger orders once shoppers reach a retailer’s own site. That creates a significant opening for retail advertising.”

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