OpenAI's ChatGPT ads just crossed a $1 billion run rate
OpenAI says ChatGPT Ads has reached a $1 billion annualised revenue run rate as the company expands advertising into India and other markets.
OpenAI says its ChatGPT Ads business has reached a $1 billion annualised revenue run rate in less than 200 days after launching. A run rate simply estimates what a business could make over a year if its current pace continues.
So while $1 billion does not mean OpenAI has already collected that amount in advertising revenue, it shows how quickly the business has scaled. OpenAI says tens of thousands of advertisers are now using ChatGPT Ads.
The company is also opening its Ads Manager to advertisers in India, Europe, the Middle East and North Africa, giving businesses in these markets a more direct way to buy ads on ChatGPT.
Why OpenAI wants ads in ChatGPT
For OpenAI, advertising offers a way to make money from the huge number of people using ChatGPT without asking all of them to pay for a subscription. Sam Altman's firm says ChatGPT now has more than 1 billion weekly active users.
Most of those users are not necessarily paying customers, making advertising an obvious opportunity. OpenAI already makes money through ChatGPT subscriptions, enterprise products and its API, which lets developers build AI into their own applications.
Ads add another revenue stream to that mix. And the pitch is slightly different from traditional advertising.
Instead of showing an ad simply because someone is scrolling through a feed, ChatGPT can show advertising when a user is actively exploring something.
Think about someone comparing software for their business, planning a home renovation, looking for a job or researching a new hobby. These are moments when a relevant recommendation can potentially be useful.
Ads, but with a few rules
OpenAI says ads can use the context of a conversation to make them more relevant. Depending on the user's location and settings, broader ChatGPT activity may also be used to personalise advertising. But the company says there is a clear line between the ads and ChatGPT's answers.
Ads are labelled, kept separate from responses and do not influence what ChatGPT says. That distinction is important. If someone asks ChatGPT whether a particular product is worth buying, users need to know that the answer is not simply being shaped by whoever paid for an ad.
India is now part of the push
The expansion of Ads Manager into India and other international markets is particularly significant for OpenAI's growth plans. They also said advertisers outside the US are already becoming an increasingly important part of its advertising revenue.
Smaller businesses are also joining the platform after Ads Manager opened access to them in May. OpenAI says it now has more than 50 technology and measurement partners supporting the advertising ecosystem.
The company plans to expand into more markets and introduce additional ad formats, buying options and measurement tools.
The real challenge now is making sure those ads remain useful enough to click, but separate enough that users still trust the answers around them.