OpenAI is positioning ChatGPT to become a major advertising platform, with Chief Financial Officer Sarah Friar describing the chatbot as what might result “if Google and Meta had a baby” as the artificial intelligence company looks for new ways to turn its enormous user base into sustainable revenue.
Friar made the comparison Tuesday at Goldman Sachs’ Communacopia + Technology Conference in San Francisco, outlining a strategy that could transform ChatGPT from an AI assistant supported largely by subscriptions and enterprise contracts into a major advertising business.
She said OpenAI’s advertising operation is already generating cash at a rate that would amount to about $1 billion in annual revenue, only seven months after ads were introduced on the chatbot.
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Friar attributed the “baby” analogy to Fidji Simo, the former OpenAI executive who previously oversaw the company’s commercial operations. The strategy rests on combining two advantages that have historically powered the digital advertising businesses of Google and Meta.
Google captures users at moments when they have a specific need or purchasing intention. Meta, meanwhile, has accumulated extensive information about users and their interests through its social platforms.
Friar said that ChatGPT could combine both characteristics because users often explicitly describe what they want while the system can retain context about their preferences.
“It’s high intent search, you’re telling a lot, but with the context it’s not quite people like me, it’s me, because it has all the memory of me,” Friar said.
That combination could give OpenAI a potentially powerful advertising proposition: an AI system that understands not only what a consumer is searching for, but also the circumstances and preferences surrounding the request.
OpenAI currently places basic advertisements beneath ChatGPT responses for users on its free and Go subscription tiers. Friar said the company is working toward more sophisticated formats that could be tailored to the conversational nature of AI.
She said OpenAI has already seen early indications of what a more AI-native advertising format could look like as the company develops the underlying technology and expands availability.
“This is all before we’ve really launched a format that feels truly endemic to AI,” Friar said. “That’s what I get super excited about.”
The advertising strategy underpins a major change in OpenAI’s position from only a few years ago.
In 2024, Chief Executive Sam Altman said he found the idea of combining advertising with AI “uniquely unsettling.” OpenAI is now moving in the opposite direction as it seeks additional revenue streams to support the enormous cost of operating and developing frontier AI models.
That cost structure is central to the company’s commercial challenge.
ChatGPT has grown to roughly 1 billion users, giving OpenAI one of the largest consumer audiences in the technology industry. But serving those users requires substantial computing resources, while the company is simultaneously spending heavily on data centers, AI inference, and model research.
Advertising could provide a way to monetize users who do not pay for premium subscriptions while allowing OpenAI to preserve a free tier that expands the potential reach of ChatGPT. The approach also creates a potentially important distinction between AI advertising and conventional search advertising.
A traditional search query may provide advertisers with information about what a user is looking for at a particular moment. A conversational AI system could potentially understand a much longer sequence of interactions, giving it a richer picture of the user’s objectives.
That could make advertising more relevant and potentially more valuable, but it also creates significant privacy and trust questions. The more personal context an AI system uses to target commercial messages, the more sensitive the boundary becomes between useful personalization and intrusive advertising.
OpenAI will also have to prevent advertising from compromising the perceived independence of ChatGPT’s answers. Users may be less willing to trust recommendations if they believe commercial relationships influence what the AI suggests.
The company is developing its advertising strategy as it prepares for potentially greater scrutiny from public-market investors. OpenAI and rival Anthropic both filed confidential S-1 registration statements in June as they prepare for closely watched initial public offerings. Anthropic has been more openly critical of advertising inside AI assistants, creating a potentially important difference in the business models the two companies may present to investors.
OpenAI has not set a specific IPO date, although Friar has previously indicated that a public listing could take place by the end of 2027.
The company was valued at about $852 billion in its March financing round, which raised $122 billion. That valuation places substantial expectations on OpenAI to convert its technological lead and massive user base into durable cash flows.
Advertising could become an important part of that equation.
For Friar, who previously served as Square’s CFO during its 2015 IPO and was CEO of Nextdoor when the company went public through a SPAC in 2021, the challenge is to demonstrate that OpenAI’s extraordinary AI spending can eventually produce the economics expected of a technology company approaching the public markets.
ChatGPT’s consumer business, enterprise products and advertising operation will all have to grow rapidly enough to offset the cost of running more capable models and building the infrastructure required to support them.
OpenAI’s bet is that the same conversational context that makes ChatGPT useful can also make it unusually valuable to advertisers. If that model works, the company could establish a new category of advertising built around AI-mediated decisions rather than traditional search results or social feeds.
The financial opportunity is substantial, but so are the risks. OpenAI must prove that advertising can scale without eroding user trust, compromising the quality of AI responses, or creating privacy concerns around the enormous amount of contextual information ChatGPT can accumulate.
Therefore, the “Google and Meta” comparison captures more than OpenAI’s advertising ambition. It describes the company’s attempt to combine two of the most valuable properties in digital advertising with a new interface in which consumers tell an AI system exactly what they want.