OpenAI just announced it will begin testing ads inside ChatGPT, marking a dramatic reversal for a company whose CEO once called advertising "a last resort."
The move signals a big shift in how OpenAI plans to monetize the world's most popular AI chatbot, and it could reshape the digital advertising landscape in the process.
To understand what's really driving this decision and what it means for businesses, I spoke with SmarterX and Marketing AI Institute founder and CEO Paul Roetzer on Episode 191 of The Artificial Intelligence Show.
The announcement would be notable on its own. But it becomes far more interesting when you consider what Sam Altman has said publicly about advertising in the past.
During a fireside chat at Harvard University in May 2024, Altman was asked whether OpenAI would ever consider an ad-supported model. His response was unequivocal.
"I will disclose just as a personal bias that I hate ads," Altman said at the time. "I think ads were important to give the early internet a business model. But I think they do sort of somewhat fundamentally misalign a user's incentives with the company providing the service."
"Ads plus AI is sort of uniquely unsettling to me,” he added.
Then came the kicker: "I kind of think of ads as a last resort for us."
Why OpenAI is testing them now isn't complicated: The company is burning through cash at a staggering rate, and the vast majority of its users don't pay for the service (under its free model).
As of July 2025, only about 5% of ChatGPT's weekly active users paid for Plus or Pro subscriptions, according to internal data reported by The Information, With roughly 800 million weekly active users, that means approximately 95%, somewhere around 700 million people, use the service for free.
OpenAI has projected its cash burn will exceed $200 billion through 2030. The company is simultaneously pursuing massive infrastructure investments through initiatives such as Stargate, seeking an $830 billion valuation in its latest funding round, and exploring a potential IPO.
Against that backdrop, an ad-supported model for non-paying users starts to look like a necessity.
OpenAI has outlined a set of principles designed to address the very concerns Altman raised at Harvard. The company says ads will not influence ChatGPT's responses, conversations will remain private from advertisers, and all sponsored content will be clearly labeled and separated from organic answers.
The initial test will roll out in the coming weeks for adults in the United States on the free tier and the new $8-per-month Go tier. Plus, Pro, Business, and Enterprise users will not see ads.
OpenAI also emphasized what it won't do: optimize for time spent in the app, sell user data, or show ads near sensitive topics, including health, mental health, and politics.
"People trust ChatGPT for many important and personal tasks, so as we introduce ads, it's crucial we preserve what makes ChatGPT valuable in the first place," wrote Fidji Simo, OpenAI's CEO of applications, in a blog post announcing the test.
The company even teased future possibilities: "Conversational interfaces create possibilities for people to go beyond static messages and links. For example, soon you might see an ad and be able to directly ask the questions you need to make a purchase decision."
For brands and media buyers, there are big implications with this. ChatGPT's user base dwarfs many established advertising platforms, and the vast majority of those users are currently unreachable through paid channels.
"It is a massive audience," says Roetzer. "You definitely have to be thinking about that if you're a brand."
The opportunity extends beyond simple reach. If OpenAI delivers on its vision of conversational advertising, where users can ask follow-up questions about products before making purchases, it could represent an entirely new category of ad engagement.
For small businesses and emerging brands, AI-powered ad targeting and creative tools could level a playing field that has historically favored companies with large marketing budgets and sophisticated data operations.
The decision to introduce ads creates an interesting opening for OpenAI's competitors.
"The really interesting strategic play here is, if you're Google or Anthropic and you don't necessarily need the ad revenue, do you actually just let them do ads?" says Roetzer.
For Anthropic, which generates the bulk of its revenue through API sales rather than consumer subscriptions, an ad-free Claude could become a meaningful differentiator.
"Could be a differentiator for sure," says Roetzer. "If you're not going to do it, it's like, 'Hey, come to the ad-free experience.’"
Google faces a more complicated choice. The company built its empire on advertising, but Gemini's positioning as a premium AI assistant could benefit from remaining ad-free, at least initially.
The question is whether user behavior will actually shift based on ad presence, or whether ChatGPT's first-mover advantage and its features will keep users locked in regardless.
OpenAI's ad rollout is a sign that the economics of AI are starting to collide with the economics of the internet as we've known it.
The company that promised to build AGI for the benefit of humanity is now asking whether advertising can help fund that mission. The CEO who called ads "uniquely unsettling" in the context of AI is now hoping users will find them "useful."
Whether you see this as pragmatic evolution or concerning drift depends largely on whether you believe OpenAI can actually deliver on its principles by keeping ads separate from answers, protecting user data, and prioritizing experience over revenue.
If they can, this could represent a sustainable path to making powerful AI accessible to billions of people who would never pay $20 a month for it. The ad-supported internet, for all its flaws, did democratize access to information in ways that subscription models never could.