This company is developing an AI companion device that was born from its acquisition of the design firm of former Apple designer Jony Ive, with plans for 100 million units. The Wall Street Journalsays that OpenAI could become as ubiquitous as the smartphone. OpenAI, if it takes off, could become as ubiquitous and as ubiquitous as smartphones.
This is one of the few high margin businesses that can absorb both the hardware and AI scaling costs. OpenAI is building a user-centric ecosystem with ChatGPT, GPT Store, and a possible Always-On Device. This is exactly what advertisers are looking for. OpenAI isn’t saying much about ads but it’s building an ecosystem that will rarely be ad-free long.
OpenAI’s addition of Instacart’s CEO and Meta alum Fidji Simo to its CEO of applications earlier this month suggests that ads will not be a side hustle but their play. You wouldn’t hire the architect of Meta’s monetization engines if you weren’t planning to build your own. OpenAI CEO Sam Altman dismissed ads early as “a few dimes”. This pocket change is beginning to resemble the entire business model.
OpenAI’s ChatGPT app has a subscription service, but only 4% of its 500 million users pay for it, according to the company. The remaining 96% of users could be bombarded with ads. They are not paying in money, but rather with their attention.
Matt Garbutt is the director of AI and Creative at Brave Bison. He said, “It has been inevitable for some time that ads would be in ChatGPT soon and this news will certainly speed up that process.” “OpenAI can’t finance millions of units of pocket sized AI companions with PS20 a monthly subscription alone. Investors, who are valued at $157 billion, also want a return. It is therefore more than likely that ad revenue will be squeezed once the hardware reaches scale.
OpenAI has not responded to a comment request.
This is a familiar moment for advertising executives. The tech industry loves to treat advertising like one of many ways to monetize — until scarcity forces their hand. Ads are not only viable, but inevitable if a product reaches a large audience. Netflix, Amazon Prime Video and Disney+ are just a few examples. The freemium model is based on this logic: grow quickly, give it away and then monetize attention. AI may rewrite targeting rules, but the fundamentals are still the same. Attention is still a valuable asset. Ads remain the engine.
If ChatGPT introduces advertising, it raises questions about user trust, and how intent is surfaced in this environment, said Daryl Goodman Gordon, vp sales, Squared.io. “Right Now, the biggest opportunity — and challenge– lies in platforms where intent is already obvious, like Google Ads. Search remains one of the least optimized channels in our experience. This is not because of a lack of spending, but rather because automation hasn’t been able to keep up with the complexity.
But flipping the switch isn’t easy.
It’s a huge task, explained Karsten Weide. Principal and chief analyst at W Media Research. Standing up a global ad business means navigating a maze of regulations, regional user behaviours and wildly different levels of market maturity — each demanding tailored infrastructure strategy and staffing, said Weide. It’s both capital and talent intensive, eepcially for a company already burning through billions of dollars a year.
But crack that code, and advertisers will come. They;re not afraid of another scaled platform, they’re actively looking for one. As the dominant platforms become more expensive, more regulated, and increasingly opaque, OpenAI represents something rare: a frontier platform with massive reach, fresh context, and untapped inventory.
Crack that code, and advertisers will come. They’re already actively seeking an already scaled platform. As the dominant platforms become more expensive, more regulated, and increasingly opaque, OpenAI represents something rare: a frontier platform with massive reach, fresh context, and untapped inventory.
“ChatGPT’s power lies in conversation, not clicks,” said Chris Pearce, managing director, search and social specialist Greenpark. “That opens the door to intent-led, integrated, possibly native ad formats that feel more like recommendations than banners. Think sponsored answers that are transparently marked, or priority product placements that align with user context.”
What that opportunity looks like, though, is still taking shape. The breadcrumbs Altman has dropped so far point toward something closer to an affiliate model than traditional advertising. Instead of selling ad slots inside ChatGPT, OpenAI might take a cut when users act on research they’ve done through it and buy or download something. It’s a model that can work but it has its limits. It’s too niche, too transactional, and likely to be as misaligned with user intent. Which is to say, it doesn’t scale like advertising. And it doesn’t unlock the full value of OpenAI’s growing ecosystem.
“I expect what we will eventually see them rollout is a native integration that is sensitive to not sacrifice user experience and partner quality,” said Matt Barash, chief commercial officer at Nova. “We’ll see new ad formats and new forms of targeting which will enable the complete reinvention of search practices as we have known it.”
For now, though, affiliate appears to be the direction of travel. Just last month, OpenAI ruled out updates allowing users to shop directly from their search results in ChatGPT. Whether its fashion, beauty, homegoods or electronics, the platform now serves up personalized recommendations, visual product details, price comparisons and reviews — with direct links to buy them from merchant sites, all within the ChatGPT interface. As it stands, these product results can’t be bought — they’re earned.
“ChatGPT stepping into shopping doesn’t just tweak the funnel — it tears it open,” said Nina Goli, head of digital strategy at Modern Citizens. “We’re already in the age of ambient discovery, and now AI is another layer breaking the scroll and re-routing how people find, choose, and buy. It’s not a storefront. It’s a conversation.”
This new frontier is coming into focus fast. OpenAI is moving into commerce, Perplexity has spent months laying the groundwork for an ads business, and Google is aggressively rewiring its entire ad stack around AI. What used to be a series of experiments is quickly becoming the industry’s new default.
