OpenAI says ads aren’t coming soon – if ever
Advertising may be coming to OpenAI’s consumer-facing products as the company shifts to a non-profit model and seeks cash to cover the high costs of developing AI – but the company says it’s an if, not a when.
That is according to an interview in the Financial Times, in which CFO Sarah Friar told the newspaper that OpenAI was considering how to introduce ads in a “thoughtful” way – perhaps helped by OpenAI’s recent hiring of chief product officer Kevin Weil, who previously worked on ad products at Instagram and Twitter. Further unnamed sources at the company backed up the report, suggesting CEO Sam Altman was increasingly welcoming the idea.
However, OpenAI has since stressed the interview was intended to discuss possibilities being considered, not a formal plan – an if, not a when – saying there was plenty of potential within the company’s existing business model and that the hiring of anyone with experience in advertising was merely a coincidence.
Friar said in a statement shared with journalists after the interview: “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.”
High costs of developing AI
OpenAI had been on the hunt for funding as the costs of developing AI stack up, amid reports its costs could top $8.5 billion in 2024 – well above that of rivals such as Anthropic, which is expected to spend $2.7bn. OpenAI is predicted to post revenue of $3.6 billion, partially from sales of API access to companies.
In October, the company lined up $6.6 billion from investors including Microsoft and Nvidia, requiring those taking part in the funding round to be “involved in a meaningful way” in the business – and not invest in other AI companies.
The investment marked a bit of good news for the company after a series of high-profile executive departures.
And, that funding came a week after OpenAI announced a controversial shift away from its non-profit roots to a for-profit model has sparked an injunction from Elon Musk, who was previously associated with OpenAI but has since started his own rival, xAI.
Musk’s injunction, filed on Friday, seeks to stop OpenAI from restructuring to a for-profit company – and accused it of violating antitrust laws for its requirement that funders not invest in rival AI companies. According to the filing, Musk is aware of one major investor who has previously invested in xAI but opted out in a subsequent round.
The filing accuses Microsoft and OpenAI of violating the terms of Musk’s initial multi-million donations to OpenAI when it was a charity.
In its introduction, the filling reads: “It would be one thing if Microsoft were, once again, engaging in anticompetitive conduct, this time with OpenAI. It would be another if OpenAI, aided and abetted by Microsoft, were violating the terms of Musk’s foundational contributions to the charity. But OpenAI and Microsoft together exploiting Musk’s donations so they can build a for-profit monopoly, one now specifically targeting xAI, is just too much.”
The filing continues that allowing this “course of conduct” to continue while awaiting court action will harm Musk, rival AI companies, and the public at large. “Plaintiffs and the public need a pause,” it added. “OpenAI’s path from a non-profit to for-profit behemoth is replete with per se anticompetitive practices, flagrant breaches of its charitable mission, and rampant self-dealing.”
The lawsuit leveled at OpenAI by Musk was initially withdrawn in the summer, before being subsequently expanded.
A statement by OpenAI said the suit “continues to be utterly without merit.”
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