ChatGPT could prioritize sponsored content as part of ad strategy — sponsored content could allegedly be given preferential treatment in LLM’s responses, OpenAI to use chat data to deliver highly personalized results

OpenAI is allegedly still working on adding ads to ChatGPT, with sources saying staff are discussing ways to bake them into the chatbot’s responses. According to The Information, the AI company is looking to create a new type of digital ad rather than simply copying what existing search and social media companies are running. This is possible because OpenAI can use historical chat data to serve ads that are highly relevant to users' interests.

“As ChatGPT becomes more capable and widely used, we’re looking at way to continue offering more intelligence to everyone. As part of this, we’re exploring what ads in our product could look like,” OpenAI told The Information. “People have a trusted relationship with ChatGPT, and any approach would be designed to respect that trust.”

Staff discussions on ad implementation have ranged from prioritizing sponsored content in the chatbot’s answers to adding a sidebar that shows ads related to the user's query. They’ve also considered showing them only when the conversation moves toward shopping or similar activities, or as a secondary step where ads are displayed only when someone clicks a link in ChatGPT’s results.

It’s been reported that OpenAI is shifting its focus away from ads, especially after CEO Sam Altman declared a ‘Code Red’ for the company following the latest version of Google’s Gemini, which outpaced ChatGPT in several benchmarks. Altman said that OpenAI needed to improve the AI chatbot’s personalization, speed, and reliability, and cover a broader range of topics, so the company is pausing work on all other projects to focus on these capabilities. However, it seems to be continuing progress on ChatGPT ads, despite the recent change in focus.

ChatGPT has three main revenue streams at the moment — subscriptions to ChatGPT Plus, Pro, and Business, API access for developers, and enterprise solutions. Aside from that, OpenAI said it will start earning revenue from non-paying users by 2026, projecting $2 per user annually, which will grow to $15 by 2030. Despite that, OpenAI has yet to turn a profit since its founding in 2015. Even though its annualized revenue hit $10 billion earlier this year, it’s still expected that the company’s operating losses will hit $74 billion annually by 2028. Nevertheless, investors continue to pour money into the company, even as some are starting to ask how its long-term profitability will look.

For comparison, Google’s ad business accounted for $237.8 billion in revenue in 2023, representing 77% of the company's total revenue. This amount is more than enough to cover OpenAI’s estimated losses, and it seems it wants to follow the search giant’s playbook by baking ads into its results as well. However, this also raises privacy concerns, especially since ChatGPT likely has much more information about its users than Google does. Furthermore, there’s the question of how OpenAI will ensure its LLM gives the best answer to the user, especially if it stands to make money by showing ads instead of organic results.

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