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ChatGPT’s free ride is ending: Here’s what OpenAI plans for advertising on the chatbot

FILE - The OpenAI logo is displayed on a mobile phone in front of a computer screen with output from ChatGPT, March 21, 2023, in Boston. (AP Photo/Michael Dwyer, File)(AP/Michael Dwyer)

OpenAI says it will soon start showing advertisements to ChatGPT users who aren’t paying for a premium version of the chatbot.

The artificial intelligence company said Friday it hasn’t yet rolled out ads but will start testing them in the coming weeks.

It’s the latest effort by the San Francisco-based company to make money from ChatGPT’s more than 800 million users, most of whom get it for free.

Though valued at $500 billion, the startup loses more money than it makes and has been looking for ways to turn a profit.

鈥淢ost importantly: ads will not influence the answers ChatGPT gives you,鈥 said Fidji Simo, the company鈥檚 CEO of applications, in a social media post Friday.

OpenAI said the digital ads will appear at the bottom of ChatGPT’s answers 鈥渨hen there鈥檚 a relevant sponsored product or service based on your current conversation.鈥

The ads 鈥渨ill be clearly labeled and separated from the organic answer,鈥 the company said.

Two of OpenAI鈥檚 rivals, Google and Meta, have dominated digital advertising for years and already incorporate ads into some of their AI features.

Originally founded as a nonprofit with a mission to safely build better-than-human AI, OpenAI last year and converted its business into a public benefit corporation. It said Friday that its pursuit of advertising will be 鈥渁lways in support鈥 of its original mission to ensure its AI technology benefits humanity.

But introducing personalized ads starts OpenAI 鈥渄own a risky path鈥 previously taken by social media companies, said Miranda Bogen of the Center for Democracy and Technology.

鈥淧eople are using chatbots for all sorts of reasons, including as companions and advisors,” said Bogen, director of CDT鈥檚 AI Governance Lab. 鈥淭here鈥檚 a lot at stake when that tool tries to exploit users鈥 trust to hawk advertisers鈥 goods.鈥

OpenAI makes some money from paid subscriptions but needs more revenue to pay for its more than $1 trillion in financial obligations for the computer chips that power its AI services. The risk that OpenAI won鈥檛 make enough money to fulfill the expectations of backers like Oracle and Nvidia has amplified investor concerns about an .

鈥淚t is clear to us that a lot of people want to use a lot of AI and don鈥檛 want to pay, so we are hopeful a business model like this can work,鈥 said OpenAI CEO Sam Altman in a post Friday on social platform X. He added that he likes the ads on Meta’s Instagram because they show him things he wouldn’t have found otherwise.

OpenAI claims it won’t use a user’s personal information or prompts to collect data for ads, but the question is 鈥渇or how long,鈥 said Paddy Harrington, an analyst at research group Forrester.

鈥淔ree services are never actually free and these public AI platforms need to generate revenue,鈥 Harrington said. 鈥淲hich leads to the adage: If the service is free, you鈥檙e the product.鈥

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