AI startups are looking to embrace advertising amid mounting pressure to ensure that the billions of dollars in investments pay off.
OpenAI is reportedly discussing plans to roll out advertisements in its AI products as it looks to transition to a for-profit company by next year.
The AI startup is contemplating an ads model while being “thoughtful about when and where we implement them [ads],” Sarah Friar, chief financial officer at OpenAI, was quoted as saying by Financial Times.
OpenAI has also reportedly been putting together a team to introduce ads on its AI products. In May, the San Francisco-based entity tapped Shivakumar Venkataraman, the former head of Google’s search advertising team, to be its vice-president.
Kevin Weil, OpenAI’s chief product officer, was responsible for developing ad-supported features on Meta-owned Instagram and Elon Musk’s X.
However, in a statement to the business daily, Friar clarified, “Our current business is experiencing rapid growth and we see significant opportunities within our existing business model. While we’re open to exploring other revenue streams in the future, we have no active plans to pursue advertising.”
Currently, one of OpenAI’s primary sources of revenue is the application programming interface (API) fees paid by businesses and developers to access and build their AI products on top of its foundational models such as ChatGPT and GPT-4o.
However, the Sam Altman-led group is looking to shed its non-profit tag and become a more traditional for-profit company with a revamped corporate governance structure.
In October this year, OpenAI became one of the most valuable private companies in the world after raising over $6.6 billion in new funding at a staggering valuation of $150 billion.
Despite these fundraising rounds, OpenAI is looking for new ways to commercialise its AI technology in order to offset the steep costs of developing frontier AI models like ChatGPT powered by thousands of heavily priced Graphics Processing Units (GPUs).
Other AI startups such as Jeff Bezos-backed Perplexity are also embracing advertising amid mounting pressure to ensure that the billions of dollars in investments pay off.
Content retrieved from: https://indianexpress.com/article/technology/artificial-intelligence/openai-mulling-rollout-ads-ai-products-9703553/.
