Background: OpenAI is the company behind ChatGPT, now valued at roughly $500 billion USD. What started as a clever chatbot is now a daily tool for around 800 million monthly users, helping with everything from work emails to admin headaches and a little bit of vibe-coding too.

What happened: Now, OpenAI has confirmed it will begin testing ads inside ChatGPT for free users, as well as on its new “ChatGPT Go” tier. Ads will appear at the bottom of conversations, be clearly labelled as sponsored and will be targeted to the topic being discussed. Higher-priced plans will stay ad-free (at least for now).

What else: The move is a pretty big shift for a company whose CEO previously said he “hates” ads. But running massive AI models requires massive data centre spend - so OpenAI needs to make some more moula...fast! And this monetisation approach looks veeeeery familiar to the ones used by modern streaming or social platforms.

What's the key learning?

💡While AI chatbots may be new technology, they’re using the same old way of making money. The "freemium plus ads" model has worked for years at Spotify and YouTube, and more recently with Netflix, where 55% of new sign-ups now choose the ad-supported tier.

💡The belief of these tech companies is that every user should generate revenue...in some way. You either pay with cash through subscriptions or with attention through ads... or a bit of both. This model lets OpenAI monetise casual users and upsell heavier ones at the same time.

💡But ads come with real risk in a competitive AI market. If ads feel intrusive or unsettling, users can switch chatbots pretty quickly... unless ads becomes the industry standard across all AI assistants.