OpenAI launches ads on select ChatGPT plans in India to support wider access

OpenAI has launched ads on ChatGPT for select plans in India, one of its largest and most active markets, as the artificial intelligence company looks to maximize its revenue ahead of its planned listing next year.

The advertising would support “broader access to ChatGPT through free and lower-cost tiers,” an OpenAI spokesperson told CNBC in an email. Ads have been launched for free users and those on the Rs 399 ($4) per month ‘Go’ plan.

The advertising feature is now available in 38 countries, including the US, Japan, Korea, and 31 European countries, according to information shared by the company.

“India is one of ChatGPT’s largest and most active markets,” the spokesperson said, adding that OpenAI’s priority is “to learn from users and advertisers while protecting the experience that made ChatGPT valuable in the first place.”

The company also added that it does not serve ads to users who identify as under 18 or who the algorithm predicts will be under 18.

OpenAI plans to go public in 2027 and faces pressure to justify its $852 billion valuation ahead of its initial public offering, especially as some of its key metrics lag behind rival Anthropic, which is also preparing to list on public markets.

Monetization through ads will help OpenAI partially cover the cost of generating inferences for a query and curb the company’s losses, experts said.

Unlike Anthropic, which derives a greater proportion of its revenue from companies, OpenAI is more popular with individual consumers, explained Ujjwal Chaudhry, a partner at market intelligence firm Analysys Mason.

To monetize a large-scale individual consumer base, the advertising model is the most effective, Chaudhry said, adding that his company’s data shows that online ads account for more than 75% of total global advertising spending worth $1.18 trillion. In-app ads are a $400 billion market.

OpenAI told CNBC that “ads will be clearly labeled, visually separated and displayed below the response,” adding that “the independence of the response is non-negotiable.”

Earlier this year, Anthropic criticized OpenAI’s plans to start showing ads, insisting that its Claude chatbot will remain ad-free. Users will not see ads or sponsored links near their conversations, and the chatbot’s responses will not be influenced by third-party product placement, Anthropic said.

“OpenAI is in a difficult situation,” Dan Niles, founder and portfolio manager at Niles Investment Management, told CNBC in June. OpenAI will be caught between Anthropic, which focuses on enterprise customers, and Google, which is “the king of consumer,” Niles said, adding that Google has plenty of cash flow to fund its ambitions.

The owner of ChatGPT has rolled out the managed ads feature in India and will launch self-serve ads on September 4. Self-serve ads are popular on many social media platforms as they allow advertisers to directly use the platform to bid on ad impressions, Chaudhry said.