OpenAI is touting ads as ‘diversified business model’ as it gears up for its massive IPO

ChatGPT-maker OpenAI announced recently that its advertising business has reached a $1 billion annualised revenue rate, just 200 days after its launch, according to a report by CNBC. The company is positioning this milestone as a proof of its ‘diversified business model’ as it prepares for a massive initial public offering (IPO). OpenAI is under pressure to justify its $852 billion valuation to investors, with ads now joining enterprise offerings, consumer subscriptions, and usage-based APIs as key revenue streams.

How OpenAI’s ad business started

OpenAI started testing ads inside ChatGPT in the US back in February this year, a move that was both widely anticipated and genuinely controversial. Digital advertising has long served as the primary profit engine for other tech giants like Google and Meta, but OpenAI’s entry into that space drew direct mockery from its chief rival, Anthropic, which built its first-ever Super Bowl ad campaign specifically around contrasting itself with OpenAI’s ad push.

Where Ads Are Rolling Out Now

ChatGPT Ads are now live in more than 40 countries, and OpenAI said Monday it’s expanding self-service access to advertisers across India, Europe, the Middle East, and North Africa. Recently, the company also announced the launch ChatGPT Ads in India. The company has revealed that it is expanding its advertising program to one of ChatGPT’s largest and most active markets. The company confirmed that the ads will roll out to logged‑in adults using the Free and Go tiers, while Plus, Pro, Business, Enterprise, and Education subscriptions will remain ad‑free. WPP and Omnicom will be OpenAI’s first agency partners for ChatGPT Ads in India. With more than 50 brands set to go live this week, these agencies bring strong relationships across industries and expertise in strategy, creative, measurement, brand safety, and campaign execution. OpenAI said the model is non‑exclusive and it will continue to identify and work with other agencies.Within the chatbot, ads appear for users on OpenAI’s Go subscription tier as well as its free tier — the free tier alone makes up the vast majority of ChatGPT’s roughly 1 billion weekly active users, giving the ad business a massive built-in audience.

OpenAI’s guardrails on the Ads

OpenAI said its ads are clearly labeled and do not influence ChatGPT’s actual answers to users. The company also said advertisers do not get access to users’ private conversations, an apparent effort to get ahead of privacy concerns that have followed the rollout since its announcement in February.

What comes next

In a release, OpenAI said its next phase of growth will expand ChatGPT Ads into additional markets while introducing new ad formats, campaign objectives, buying options, and measurement tools for advertisers. The company also said it plans to explore new, more native ways for businesses to interact directly with consumers inside ChatGPT.