OpenAI Is An Ad Business Now

OpenAI Is An Ad Business Now

Jeremy Berke

Tue, September 1, 2026 at 6:17 PM GMT+3 3 min read

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THE GIST

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Ads are coming for your LLM queries: OpenAI, the company behind the LLM, said this week its advertising business hit a $1 billion annualized run rate in well under a year.

WHAT HAPPENED

OpenAI first slotted ads into ChatGPT in February in the U.S. and has slowly rolled out options for advertisers to purchase slots right in the LLM around the globe. On Monday, that option was extended to India, ⁠Europe, the Middle East and North Africa.

But rather than the search engine optimization of the mid-2010s yore, which catalyzed a boom-and-bust cycle for digital media platforms like HuffPost and BuzzFeed, these ads are placed directly into ChatGPT's output alongside similar queries. OpenAI's about to find out if the 2020s version is any different.

Ask ChatGPT for a recommendation for the best pen for taking notes, and you might be served an ad for notebooks. And so forth. It's a burgeoning marketing-science (with a healthy dash of pseudoscience) field called GEO, or Generative Engine Optimization.

WHY IT MATTERS

Similar to how AI's proselytizers like Sam Altman and Dario Amodei say the technology will kill everything from physical books to various entry level professions, GEO is spoken, prophecy-like, as a harbinger of doom for search businesses like Google.

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But sustaining that $1 billion run-rate might prove difficult. Ads are still brand-new in LLMs, which means that impressive growth is coming from zero. Analysts aren't buying the celebration, either. An eMarketer analyst called the milestone "incredibly impressive and terribly disappointing," pointing out that $1 billion in annualized run rate still leaves OpenAI well short of the $2.5 billion in ad revenue it promised investors for this year.

Anthropic clearly smells blood too. It built its first-ever Super Bowl ad around mocking OpenAI's decision to run ads at all. Justifying all that ad spend will come later. Much like the late 2010s digital media correction, it might hit harder than OpenAI thinks.

The risks are broader than a single revenue line on OpenAI's income statement, too. AI-linked stocks now make up a massive and increasing chunk of the S&P 500's market cap. The trillion-dollar buildout of data centers, chips, and power deals underneath them assumes someone eventually monetizes usage at scale. Ads were supposed to be one leg of that. If OpenAI can't make the business work, then assumptions will quickly start breaking down and threaten to bring the market with it.

WHAT'S NEXT

OpenAI needs to sell a real revenue story to Wall Street as it gears up for a potential IPO with a gigantic $852 billion private valuation. Ad businesses are real. Analysts understand how to model ad businesses and shareholders understand it.

But the biggest question remains: Does it work well enough to prop up these frothy valuations as the biggest LLM-makers march to Wall Street?