December 3, 2024 – According to a report by the Financial Times, OpenAI is contemplating the introduction of advertising into its artificial intelligence products. The company, which is currently valued at $150 billion, is in the process of transitioning towards becoming a profitable enterprise and is exploring new revenue streams.
In an interview with the Financial Times, Sarah Friar, the Chief Financial Officer of OpenAI, revealed that the company is evaluating advertising models. However, she emphasized that the company would be “selective” about when and where to place ads.
“Our core business is growing rapidly, and there is still tremendous untapped potential in our current business model,” Friar stated. “While we may explore other revenue sources in the future, we are not actively planning to introduce advertising at this stage.”
To capitalize on its leading position in artificial intelligence, OpenAI is accelerating efforts to generate revenue from its products, including its AI search engine. In contrast, its smaller rival, Perplexity, has already begun experimenting with an advertising model in its AI search services.
Earlier this year, OpenAI strengthened its advertising capabilities by hiring Shivakumar Venkataraman, the former head of search advertising at Google, as the company’s Vice President. Advertising has traditionally been a lucrative revenue stream for tech giants like Google and Meta. However, sources privy to internal discussions revealed that there are differing views among OpenAI’s management regarding the suitability of advertising.
Despite these differences, it appears that the attitude of OpenAI’s CEO, Altman, is becoming more open to the idea of advertising.
ChatGPT’s explosive growth has propelled OpenAI’s annualized revenue to 4billion,makingitoneofthefastest−growingstartupsinhistory.Justtwoyearsafteritslaunch,theplatformhasamassedover250millionusersperweek.Nevertheless,thehighcostofdeveloping”cutting−edge”AImodelsmeansthatOpenAIisfacingsignificantfinancialoutflowsintheshortterm,withestimatedannualexpensesexceeding5 billion.
Currently, OpenAI’s primary sources of income are its application program interfaces (APIs) and the sale of personal and enterprise licenses for ChatGPT. However, informed sources noted that “the API business does not have high profit margins.”
