In a bold move towards more engaging advertising, OpenAI recently activated advertisements within ChatGPT for free-tier users in the United States. This change, initiated on February 9, has already shown promising results. By late March, OpenAI announced that the pilot program had surpassed $100 million in annualized revenue, attracted over 600 advertisers, and reached a fraction of eligible users. To elevate the advertising experience, OpenAI is now partnering with Smartly, an advertising automation platform based in Helsinki, to develop conversational and interactive ad units that respond to users in real-time.
This partnership signifies a notable shift from the initial, static ad placements that OpenAI rolled out when it first revealed its advertising intentions in January. Previously, users would see sponsored cards relevant to their queries—like an air fryer ad after asking about kitchen appliances or a hotel promotion following travel-related inquiries. The new conversational ad formats, as described by Smartly, will enable users to click on ads and engage in a chatbot-like experience that provides personalized suggestions, effectively transforming the advertisement into a two-way dialogue within the ChatGPT interface.
Smartly, which reported approximately $101 million in revenue in 2025 and holds a valuation of about $300 million, is recognized for helping brands optimize their advertising campaigns across platforms like Meta, Google, TikTok, and Snapchat in real time. In the context of the ChatGPT partnership, Smartly’s role will focus on performance optimization, enabling dynamic adjustments to creative content and targeting based on user interactions with the new ad formats. Additionally, OpenAI has engaged Criteo, a French commerce-media company, as its first formal ad-tech partner, facilitating connections for around 17,000 advertisers to ChatGPT’s inventory since March 2. There are also ongoing discussions with The Trade Desk about further expanding ad sales, although no formal agreements have been announced yet.
The infrastructure for commercializing ChatGPT is being established swiftly. OpenAI appointed David Dugan, a former Meta vice-president who led global clients and agencies for over a decade, to head its new global advertising solutions team in late March. Dugan reports to COO Brad Lightcap and joins an executive team that includes Fidji Simo, the former Facebook executive and current CEO of OpenAI’s applications division, and Denise Dresser, former CEO of Slack, who was named chief revenue officer in December 2025. These strategic hires indicate that OpenAI is moving beyond mere experimentation with advertising to building a robust sales organization.
OpenAI has conveyed to its investors that it anticipates ChatGPT consumer revenue could exceed $17 billion by 2026, with advertising contributing a substantial portion of income from its non-paying user base. The numbers suggest a significant opportunity: OpenAI claims over 800 million weekly active users, yet only about 5% currently pay for subscriptions. The introduction of self-serve advertising tools is expected this month, eliminating the current $200,000 minimum commitment and making the platform accessible to small and mid-sized businesses. Pilots are anticipated in Canada, Australia, and New Zealand, with plans for broader international expansion throughout the year.
The initial pricing strategy for ChatGPT ads has been aggressive, launching at around $60 per thousand impressions. OpenAI justifies this premium based on early performance data, indicating that users referred by large language models convert at rates 1.5 times higher than those from other channels. Nearly 80% of small and medium-sized businesses have reportedly expressed interest in advertising on the platform, a figure that, if realized in actual spending following the launch of self-serve access, could reflect an exceptionally rapid growth trajectory.
The privacy measures surrounding these ads will be crucial to their success, determining whether the conversational formats can thrive or lead to backlash that undermines ChatGPT’s core appeal. OpenAI insists that conversations remain private and are not shared with advertisers, who receive only aggregated performance data such as views and clicks. Ads are prohibited from appearing near sensitive topics related to health, mental health, and politics, and users under 18 do not see them. However, critics remain vocal. Zoe Hitzig, a former OpenAI researcher, has cautioned that the company may be constructing an economic engine whose incentives could eventually override its own rules, highlighting the unique archive of personal conversations stored by ChatGPT. Concerns also arise from the potential for purchase-tracking data to return to OpenAI when users click ads and make purchases, alongside the updated privacy policy permitting contact-syncing features that may process phone numbers without explicit user consent.
Competitors are quick to capitalize on the situation. Anthropic, the creator of the Claude chatbot, utilized Super Bowl advertisements to implicitly contrast its ad-free model with OpenAI’s advertising approach, clearly framing the narrative: one company treats its users as products, while the other does not. Whether this distinction resonates with the hundreds of millions of users accessing ChatGPT for free remains uncertain, but the reputational risks are significant for a company that has branded itself as a responsible steward of artificial general intelligence.
The innovative conversational ad format being developed with Smartly represents a unique evolution in digital advertising—it is not merely a banner or sponsored link, but a dialogue that mirrors the interaction users initially sought from ChatGPT. If executed effectively, it could blur the boundaries between commercial and organic content more adeptly than any attempts made by Google or Meta. However, if this approach undermines the trust that has allowed ChatGPT to become the fastest-growing consumer application in history, OpenAI risks sacrificing its most valuable asset for a revenue stream it could have pursued more cautiously. The reported $100 million annualized run rate suggests that the former scenario is more probable, and the recruitment of an entire advertising team from the Meta era indicates that OpenAI is leaving nothing to chance.