OpenAI started showing ads inside ChatGPT this week, marking a sharp reversal from CEO Sam Altman's previous stance. Two years ago at Harvard, Altman called ads "a last resort" business model that could erode trust in the company's flagship product.
The San Francisco startup faces immediate financial pressure. OpenAI generated about $13 billion in revenue last year but expects to spend $100 billion more over the next four years on computing power for AI systems like ChatGPT.
The company must triple its revenue this year to balance its books, even as investors like SoftBank see gains from their OpenAI investments.
Most of OpenAI's consumer revenue comes from subscriptions. About 6 percent of ChatGPT's 800 million users pay at least $20 monthly for advanced versions. The new ad push targets the remaining free users, though industry veterans question OpenAI's readiness.
"OpenAI doesn't really have a sales team," said Mark Zagorski, CEO of DoubleVerify, which works with Google and other advertising companies. "They are going to have to build that infrastructure as well as the technology infrastructure needed to run an ad business."
Zagorski compared OpenAI to Netflix, which needed two years to build a viable ads business. Meanwhile, OpenAI faces competition from Google and other established advertising platforms.
The company also aims to increase enterprise revenue to 50 percent by year-end. Businesses currently pay for tools like Codex, which helps developers write code, and ChatGPT Enterprise for office use, with government entities like Dubai's utility DEWA becoming early adopters. Some Silicon Valley technologists pay up to $200 monthly for these tools.
However, OpenAI faces mounting competition in enterprise markets. Anthropic recently unveiled a Super Bowl advertisement mocking OpenAI's ad push: "Ads are coming to A.I. But not to Claude."
Altman responded on X, stating, "Anthropic serves an expensive product to rich people. We are glad they do that and we are doing that too, but we also feel strongly that we need to bring AI to billions of people who can't pay for subscriptions."
OpenAI's Codex Mac app gained one million downloads in its first week, with overall Codex users growing 60 percent following the GPT-5.3-Codex release. Altman confirmed Free and Go users will maintain access to Codex after the launch promotion, though they may face tighter limits than paying subscribers.
The company also upgraded its Deep Research feature with a full-screen report viewer, table of contents, and source verification panels, enhancing ChatGPT's research capabilities with source controls and document viewing. Users can now download reports as PDF or Word documents and instruct ChatGPT to focus on specific websites for research projects.
OpenAI recently announced a deal with Disney that grants access to characters like Mickey Mouse, Ariel, and Yoda for its Sora video-generation model starting next year. Disney will take a $1 billion stake in OpenAI, with employees gaining access to the company's APIs and ChatGPT.
The company faces challenges beyond monetization. OpenAI's o3 model, announced for safety testing among researchers, achieved an impressive 87.5 percent score on the ARC benchmark using high compute, surpassing Claude 3's 53 percent. The model introduces "program synthesis" capabilities that enable dynamic combination of learned patterns into new configurations.
Some OpenAI executives were reportedly surprised by a Wall Street Journal report suggesting the company aims to go public as soon as December. Two people familiar with internal discussions said executives believe the company isn't ready for an IPO.
At the World Economic Forum in Davos last month, OpenAI CFO Sarah Friar discussed "value sharing" as another revenue model. If OpenAI's technologies help discover new drugs, the company might take a share of profits. This concept unnerved independent scientists, prompting OpenAI to clarify it would only apply to partnerships with large pharmaceutical companies.
"This is the critical issue on the minds of tech investors today," said Karl Keirstead, a UBS analyst. "OpenAI has no choice to move more aggressively into enterprise software."
The company hired Fidji Simo, former Instacart CEO and longtime Facebook executive, as chief executive of applications in May. Simo previously pushed Instacart toward an ad-based business model. OpenAI also recruited hundreds of employees from X and Meta, many with ad product experience.
OpenAI's hardware plans face delays. The company dropped "io" branding for its planned AI devices following a trademark lawsuit with audio startup iyO. Customer shipments aren't expected until February 2027 at the earliest.
