OpenAI's ad business shows blistering growth, hits $1 billion annualized revenue run rate

OpenAI on Monday announced that its advertising business has hit $1 billion in annualized revenue run rate, a milestone that the company is touting as proof of its "diversified business model."

The artificial intelligence company is gearing up for what is expected to be a massive initial public offering, and is under pressure to justify its $852 billion valuation to investors. OpenAI said Monday that its ad business, which is roughly 200 days old, builds on its existing revenue engines like its enterprise offerings, consumer subscriptions and usage-based application programming interfaces.

OpenAI began testing ads within its ChatGPT chatbot in the U.S. in February, a decision that was both highly anticipated and controversial. Digital advertising has long been the cash cow for other big tech companies like Google and Meta, but OpenAI's move was ridiculed by its chief rival, Anthropic, which made OpenAI's ad push the focus of its first Super Bowl campaign.

ChatGPT Ads are now available in more than 40 countries, and OpenAI said it's rolling out self-service access across India, Europe, the Middle East and North Africa on Monday. Ads within the chatbot appear for OpenAI's Go subscribers and its free tier, which makes up the vast majority of its 1 billion weekly active users.

OpenAI said Monday that its ads are clearly labeled and do not influence ChatGPT's answers. Advertisers do not have access to users' private conversations.

"Our next phase of growth will bring ChatGPT Ads to more markets and introduce additional formats, objectives, buying options, and measurement capabilities," OpenAI said in a release. "We will also explore new ways for businesses to interact with consumers in more native ways in ChatGPT."

— CNBC's Kate Rooney contributed to this report.

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