TLDR
- OpenAI engaged in preliminary discussions with The Trade Desk (TTD) to facilitate ad sales on ChatGPT
- Following the report, TTD saw a 9.3% increase in after-hours trading; AppLovin (APP) also rose by over 1%
- OpenAI is testing advertisements with logged-in adult users on the Free and Go subscription tiers
- As of late February, OpenAI’s annualized revenue reached $25 billion, marking a 17% increase from the $21.4 billion recorded at the end of last year
- OpenAI secured $110 billion in its most recent funding round, with contributions from Amazon, Nvidia, and SoftBank
The Trade Desk (TTD) experienced a 9.3% surge in after-hours trading on Wednesday, following a report by The Information that OpenAI had engaged in initial discussions with the ad tech company regarding advertising sales on ChatGPT.
The Information states that OpenAI held preliminary talks with The Trade Desk regarding ad sales, including automating and expanding ChatGPT ad sales.
The report indicates that OpenAI anticipates advertising could double consumer ChatGPT revenue to $17 billion this year.
— Wall St Engine (@wallstengine)
According to the report, the discussions are still in the early stages, with sources close to the matter confirming this.
OpenAI recently initiated ad testing within ChatGPT in the U.S. This test is restricted to logged-in adult users on the Free and Go subscription tiers.
The company seems to be relying on external partners to develop its advertising business rather than handling it entirely internally.
Additionally, OpenAI is reported to be in discussions with brands, media agencies, and other ad tech firms as part of the early advertising pilot.
Ad tech competitor AppLovin (APP) also saw a rise of over 1% in response to the news.
OpenAI’s Revenue Surge
According to a separate report, OpenAI’s annualized revenue reached $25 billion by the end of February, representing a 17% increase from the $21.4 billion recorded at the close of last year.
The company projects total revenue exceeding $280 billion by 2030, with approximately equal contributions from its consumer and enterprise segments.
On the enterprise front, OpenAI faces competition from Anthropic and Google, both of which are actively marketing AI capabilities to businesses.
A $110B Funding Round
Last Friday, OpenAI confirmed it had secured $110 billion in its most recent funding round.
Amazon contributed $50 billion, with Nvidia and SoftBank each investing $30 billion.
This fundraising round is among the largest in tech history, providing OpenAI ample room to expand its business areas, including advertising.
Including ads in ChatGPT is part of a broader effort to diversify the company’s revenue streams, alongside its subscription models and enterprise agreements.
The Trade Desk, which runs a self-serve programmatic ad platform, would bring scale and infrastructure to assist OpenAI in managing ad placements across its expanding user base.
No final agreement has been confirmed by either company at this time.
