Artificial Intelligence carries a substantial cost. Major players in this industry employ a variety of approaches to fund their operations. For example, OpenAI relies on investment from backers, whereas companies like Google have started monetizing early or prioritized access to their offerings. Initiatives such as Google’s Gemini illustrate another approach by embedding AI within a broader corporate ecosystem.
Moreover, there is a vast business and enterprise sector that presents opportunities for revenue generation through API access.
One financing avenue expected to gain momentum is advertising. Some AI platforms seem to be starting to incorporate ads; for instance, Microsoft’s Copilot could eventually feature advertisements, and Perplexity has recently initiated ad-testing projects.
OpenAI might consider adopting a similar strategy. Currently, the organization earns revenue through paid subscriptions, but it is quickly exhausting funds from investment rounds.
A report (paywalled) by the Financial Times suggests that OpenAI is weighing the possibility of implementing ads. Adding advertisements to ChatGPT or other offerings might alleviate some of the costs related to the development and upkeep of AI technologies. While the report does not directly state it, this may imply that advertisements might only appear to non-paying users.
Sarah Friar, OpenAI’s chief financial officer, has mentioned that the company will be cautious about the integration of ads. She emphasized that there are no “active plans to pursue advertising” at this time.
The Financial Times’ analysis of OpenAI’s recruitment indicates that the company has recently hired individuals with advertising expertise from companies such as Google and Meta. In May, OpenAI appointed Shivakumar Venkataraman, who once led Google’s search advertising division, as their vice president.
Both Friar and Chief Product Officer Kevin Weil have backgrounds in advertising. Weil played a key role in developing ad-supported features at Instagram and X.
OpenAI is currently working on a search engine, which could facilitate the introduction of advertising. Given that most search engines leverage display ads for revenue, such an addition would likely be familiar to users.
Even if OpenAI is not actively pursuing advertising at the moment, attaining profitability will eventually become essential.
Friar has acknowledged the challenges associated with advertising, as highlighted in the Financial Times article; she has indicated that ads might redirect a company’s attention from its users to meeting the demands of advertisers.
The development of AI could mirror the trajectory of streaming platforms, where consumers initially enjoy an ad-free experience, subscribe for exclusive content, and eventually encounter ads. Most companies are likely to investigate advertising avenues, at the very least.
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