The news: OpenAI will begin testing targeted ads in ChatGPT for select US users in a major revenue push, the company announced Friday.

• The popular chatbot will begin displaying ads in the coming weeks for free ChatGPT users, as well as users on the paid “Go” plan. Users on higher cost tiers will not see ads.
• OpenAI will begin by testing ads for sponsored offerings at the bottom of ChatGPT responses, ensuring ads are separate from the main response.

Zooming out: The move comes despite previous claims from CEO Sam Altman that advertising in ChatGPT would be a “last resort,” indicating broader struggles for a company that isn’t expected to be profitable for years to come.

But despite Altman’s claims, ChatGPT has long been rumored to introduce ads:

• A December OpenAI leak indicated that chats were coming to ChatGPT, after computer engineer Tibor Blaho discovered code in ChatGPT’s Android app referencing search ads.
• OpenAI posted a listing for a “Growth paid marketing platform engineer” in September, signaling its plans for in-house advertising systems and ad-buying infrastructure.

The trend: The introduction of ads on ChatGPT is critical as competitors are already pushing ahead with ad monetization.

• AI tools like Microsoft’s Copilot have proven the effectiveness of AI ads. Early tests within the Copilot chatbot saw a 153% lift in clickthrough rates and a 54% improvement in user experience compared with traditional search.