AI is expensive. Major players have a number of options to finance their operations. Some receive funding, like OpenAI does. There is also the option to charge for early access or priority access, which OpenAI, Google, and others are doing. Then there is the option to develop AI as part of a larger organization. Google does that with Gemini, for instance.

There is also the business and Enterprise world to consider. Access to APIs is another revenue source.

Another option that will likely rise in popularity in the near future is the use of ads. Some AI systems may display ads already. Microsoft's Copilot on Windows, for instance, may show ads. Perplexity, another popular system, started advertising experiments less than a month ago.

OpenAI may go down the same route. The company earns money from paid subscribers currently and is burning through a lot of money that it received in financing rounds.

A report (paywalled) by the Financial Times confirms that OpenAI is considering ads. OpenAI would integrate ads into ChatGPT or other company products to help finance the costs of running and developing AI systems. While not mentioned explicitly, it is possible that only non-paying users would see ads when they use the platform.

Sarah Friar, chief financial officer at OpenAI, told the Financial Times that the company would be thoughtful when it came to the integration of ads on the platform. She claims that the company has no "active plans to pursue advertising".

A Financial Times analysis of OpenAI's hiring shows that the company did hire advertising talent from companies like Google and Meta recently. In May, the company hired Shivakumar Venkataraman, who led Google's search advertising time before joining OpenAI as vice-president.

Friar and Kevin Weil, OpenAI's Chief Product Officer, do have advertising experience. Weil helped build ad-supported products at Instagram and X.

OpenAI is working on a search engine, which could also open up possibilities of integrating advertising. The ads would feel natural to the majority of users, as most search engines use display ads to generate revenue.

Even if OpenAI is not pursuing plans to inject ads into products right now, it has to become profitable eventually.

Friar is aware of the drawbacks of ads according to the Financial Times article. Ads could make a company shift from focusing on users to pleasing advertisers.

Closing Words

AI could go down the route of streaming services. Start with an ad-free experience, offer paid plans, only to introduce ads at a later point in time. Most will probably experiment with ads at the very least.

Now it is your turn. Do you mind ads in free products? If there would be a paid ad-free option, would you take it instead? Feel free to leave a comment down below.