Why Ads on ChatGPT Are More Terrifying Than You Think

OpenAI’s silent confirmation that advertising is coming to ChatGPT (screenshot above) marks the end of the chatbot’s introductory phase and the beginning of a new nightmare for users. While the timing aligns with its third anniversary—happy birthday to you, I guess—framing this as a self-gift rather than a necessary structural pivot would be naive; OpenAI will sell ads, or it will die. (Last-minute news from The Information reveal that CEO Sam Altman is sufficiently worried about Google’s Gemini 3 that they’re considering delaying ads and similar initiatives in favor of improving the quality of the model.)

It is a bad sign that this is a forced move rather than a free choice, though: People would complain anyway if OpenAI wanted ad revenue to amass some profits, but that’s standard capitalism; the fact that OpenAI can’t afford the things it intends to build unless it enables ads suggests a fundamental flaw at the technological level: maybe large language models (LLMs) are not a good business (the financials don’t paint a pretty picture so far). If that’s the case, then this is not an OpenAI problem but an industry-wide catastrophe: whereas traditional search engines display ads because users want free information, chatbots will have ads because the costs are otherwise untenable.

The unit economics of LLMs have always been precarious; the cost of inference—the computing power required to generate a response, which is, accounting for everything, larger than the cost of training a new model when you serve 800 million people—remains high compared to web search because small-ish companies like OpenAI need to rent their compute to cloud companies like Microsoft; their operational expenses are sky-high! (cloud-high one might say). The twenty-dollar subscription tier (chatbot providers all have converged at ~$20/month) was an effective filter for power users, but it was never going to subsidize the massive operational costs of the free tier, which serves as both a user acquisition funnel and a data collection engine (and thus a fundamental piece of the puzzle, in case you wondered why OpenAI offers a free tier in the first place).

(Short note: the reason AI model inference is expensive for OpenAI compared to search for Google—say, a ChatGPT query vs a Google search query—is not that the former requires more energy than the latter; according to the most recent estimates they’re in the