"OpenAI's move into advertising is set to reshape the digital ad ecosystem, with Needham & Company warning that its entry represents "a fundamental re-calibration of the intent-based economy that has historically been dominated by and ." In a note on Monday, analyst Laura Martin cited OpenAI's Jan. 16 announcement that ads will appear in its free and mid-tier Go plans, sold on a CPM basis rather than performance-based pricing."
"With "800 million weekly active users," analysts estimate the company "could generate up to $20B of ad revs/year within the next 5 years," depending on execution. The firm argued that OpenAI needs advertising to offset "high costs of AI compute, infrastructure, and growth," while a second major revenue stream could lift its valuation multiple. If OpenAI reaches that revenue level, Needham stated that "at least some of it must come from the Walled Gardens," including Google, Meta and Amazon,"
OpenAI will place ads in its free and mid-tier Go plans using CPM pricing rather than performance-based models. The platform reportedly reaches around 800 million weekly active users and could generate up to $20 billion of ad revenue per year within five years, depending on execution. Advertising revenue is positioned to help offset high AI compute, infrastructure, and growth costs and to provide a second major revenue stream that could boost valuation multiples. Some of this revenue is likely to be captured from established Walled Gardens such as Google, Meta and Amazon. Data indicates AI-generated answers can reduce website click-through rates by 20-40%, raising questions about advertiser preference for ChatGPT placements and which platforms will lose share as AI interfaces redefine user intent and ad value.
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