OpenAI, the tech startup renowned for its AI products like ChatGPT, is considering introducing advertisements as part of its monetization strategy, according to Chief Financial Officer, Sarah Friar.
While no definitive plans have been announced, Ms Friar emphasized a “thoughtful” approach to determining how and where ads might fit into OpenAI’s ecosystem.
The company, recently valued at $150 billion after a $6.6 billion funding round in October, is already preparing for this potential shift by hiring advertising experts from industry giants such as Google and Meta.
These hires include Shivakumar Venkataraman, Google’s former Head of Search Advertising, now OpenAI’s Vice President, and Kevin Weil, the Chief Product Officer who played a pivotal role in developing Instagram’s ad platform.
Currently, OpenAI generates most of its revenue through enterprise and individual subscriptions to ChatGPT and by licensing its API to developers and businesses.
However, the high costs associated with developing and maintaining cutting-edge AI models, coupled with thin margins on API access, have prompted the company to explore alternative revenue streams.
Chief Executive Officer (CEO), Sam Altman, speaking recently at Harvard, referred to advertising as a “last resort,” citing concerns about its potential to shift the company’s focus from users to advertisers and its vulnerability to economic downturns.
He added,”… I’m not saying OpenAI would never consider ads, but I don’t like them in general, and I think that ads-plus-AI is sort of uniquely unsettling to me.”
Despite his reservations, the strategic hiring spree signals that OpenAI is laying the groundwork for an advertising framework, even as leadership debates its long-term implications.
