OpenAI is making a significant push into the digital advertising world with ChatGPT.
This isn't just a small experiment; it's a strategic pivot toward becoming a major advertising platform, much like Meta (Facebook) or Google. The recent expansion of its self-serve Ads Manager to all U.S. businesses, especially small and medium-sized ones (SMBs), marks a crucial step in this journey. This platform allows advertisers to directly manage their campaigns, a model that turned Meta and Google into giants.
So, why is this happening now? The primary driver is financial pressure. First, the cost of running powerful AI models like ChatGPT is immense. Reports suggest that OpenAI's expenses for inference—the process of generating answers—quadrupled in 2025, squeezing profit margins. Advertising offers a high-margin revenue stream to offset these escalating costs.
Second, their initial advertising pilot was a clear success. Within just six weeks, the program was on track to generate over $100 million annually, with strong interest from hundreds of advertisers. This strong demand signaled that the market was ready for a broader, more accessible advertising platform on ChatGPT.
Finally, the competitive landscape is heating up. Google is integrating ads into its AI-powered search results, and Meta's ad business continues to thrive thanks to its AI-driven targeting. For OpenAI to compete, it needs to turn the conversational queries on its platform into a monetizable asset, and building an SMB-focused ad business is the proven way to do it.
By copying the 'long-tail' playbook—relying on millions of small advertisers rather than a few large ones—OpenAI is building a more resilient and scalable business. However, this path isn't without obstacles. The company must navigate complex privacy and transparency regulations, such as the EU's Digital Services Act (DSA), which dictates how sponsored content must be labeled and audited. Ultimately, OpenAI is betting that it can transform ChatGPT from a revolutionary AI tool into a dominant media platform where businesses connect with millions of engaged users.
- Long-tail ad business: A strategy focused on selling a large number of unique items in relatively small quantities. In advertising, it means serving millions of small advertisers rather than a few large ones.
- Inference: The process of using a trained AI model to make predictions or generate outputs based on new input data. For ChatGPT, this is the computational work done to generate a response to a user's prompt.
- Ads Manager: A self-serve platform that allows advertisers to create, manage, and track their own ad campaigns without needing to go through a sales representative.