Running AI infrastructure costs are astronomical. Back in 2023, it was estimated that OpenAI spends around $700,000 per day to run ChatGPT—about 36 cents per query. However, in 2024 with the release of its higher-performing o3 model, some queries cost over $1,000 of computing power. Consequently, OpenAI CEO Sam Altman reports the company is even losing money on its $200 ChatGPT Pro subscriptions.
The launch of OpenAI's ads business comes at a critical point in the AI arms race. Companies are burning through billions in training and inference costs for the next big model, while revenue lags behind. The cost to use AI is driving up the cost of RAM and making memory and processors scarcer commodities. These concerns, while less visible to us in the ad world, have in turn put pressure on those companies to create revenue. Hence, ads.
Sora's launch-complete with a TikTok style "for you" page-was something of an about-face for Altman, who had previously described social media feeds as "an example of misaligned AI," whose algorithms "are incredible at getting you to keep scrolling." Altman was quick to distance OpenAI from suggestions that it had caved to the temptation to create what he called an AI-powered "slop feed."