OpenAI steps up internal review of ads for ChatGPT after Altman’s ‘code red’ alert

New Delhi: OpenAI is reportedly reassessing how advertising could fit into ChatGPT’s future, with CEO Sam Altman declaring a “code red” to prioritise improvements to the chatbot while delaying other initiatives, according to an internal memo cited by The Information. 

Although the company has not publicly confirmed any advertising rollout, it is said to be experimenting with formats, including shopping-related placements.

The discussions signal a potential shift in OpenAI’s business model, which has so far leaned on paid offerings such as ChatGPT Plus and enterprise partnerships.

The proposal under consideration would give users a choice between retaining personalised features supported by memory or turning off memory and forgoing that personalisation in return for an ad-free experience.

Research through focus groups reportedly found that some users already assume ChatGPT contains ads, a perception that has encouraged internal conversations about whether advertising may be feasible. 

The debate is being shaped in part by the large number of former Meta employees now at OpenAI. Around 630 of the company’s roughly 3,000 staff previously worked at Meta, and they have a dedicated Slack channel within the organisation.

Among them is Fidji Simo, OpenAI’s CEO of Applications, who played a key role in bringing ads to Facebook’s app during her decade at Meta. She is reportedly leading work on exploring how an ad-supported framework might function within ChatGPT and forming a team to study this further.

OpenAI’s leadership has historically been cautious about using advertising to support its products. Last December, CFO Sarah Friar told the Financial Times that the company had no active plans to pursue advertising, though it was open to exploring “new revenue streams.” 

Altman has also shared mixed views. On the Lex Fridman Podcast, he said he “kind of hates ads just as an aesthetic choice,” adding that he preferred a paid model where “users know that the answers they’re getting are not influenced by advertisers.”

However, he has acknowledged that well-executed advertising can work for consumers. In an interview earlier this year, he praised Instagram’s ad experience: “I’m not totally against it. I think ads on Instagram are kind of cool, I’ve bought a bunch of stuff from them. But it would take a lot of care to get right.”

The discussions come at a moment when the competitive landscape for AI chatbots is intensifying, and OpenAI is considering whether advertising could provide a substantial new revenue stream if introduced carefully and without undermining trust in ChatGPT’s outputs.