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OpenAI is discussing plans to introduce promoting in its artificial intelligence products because the ChatGPT maker looks for brand new revenue streams because it restructures as a for-profit company.
Sarah Friar, chief financial officer at OpenAI, told the Financial Times in an interview that the $150 billion AI startup was considering an promoting model, adding that it was “considering when and where we implement them (promoting). ” want. .
The San Francisco-based group, which secured $6.6 billion in recent funding in October, has hired promoting talent from major tech rivals reminiscent of, in keeping with several people aware of the matter and an FT evaluation of LinkedIn accounts Meta and Google discontinued.
In a press release following the interview, Friar added: “Our current business is experiencing rapid growth and we see significant opportunities inside our existing business model.” While we’re open to exploring other revenue streams in the long run, we’ve got no energetic plans to to do promoting.”
OpenAI is increasing its efforts to generate revenue from its products, reminiscent of its AI-powered search engine, to capitalize on its early leadership position within the booming AI sector. Its smaller rival Perplexity is already testing promoting in its AI-powered search engine.
Friar, who previously held leadership roles at firms like Nextdoor, Square and Salesforce, noted the wealthy promoting experience between her and Kevin Weil, the corporate's chief product officer.
Weil was previously accountable for developing ad-supported products on major technology platforms reminiscent of Instagram and X. “The excellent news with Kevin Weil on the helm of products is that he comes from Instagram. He knows the way it (introducing promoting) works,” Friar said.
In May, OpenAI also hired Shivakumar Venkataraman, who previously led Google's search promoting team, as vp.
Advertising is a hugely successful way for giant tech firms like Google and Meta to monetize their massive online audiences. But OpenAI executives are divided over what promoting might appear like on their platform, in keeping with two individuals with knowledge of the discussions.
Chief Executive Sam Altman is on board with the concept, in keeping with an individual aware of his considering.
The fast-growing company, which is now considered one of Silicon Valley's most precious private firms with a valuation of $150 billion, is within the midst of restructuring right into a for-profit company.
The high cost of coaching recent models has AI startups like OpenAI, Anthropic and Elon Musk's xAI on the lookout for recent ways to commercialize their technology, often raising funds.
OpenAI's revenue has grown to about $4 billion on an annual basis because of the overwhelming success of ChatGPT, making it considered one of the fastest-growing startups of all time. The chatbot, which launched two years ago, has grown to greater than 250 million weekly energetic users.
But the large costs related to developing “frontier” AI models mean that OpenAI expects to burn significantly more within the near future than the corporate spends every year. It is on the right track to burn through greater than $5 billion in money.
One of OpenAI's largest sources of revenue is access to its application programming interface (API), which allows firms and developers to construct with its technology, in addition to the sale of individual and enterprise licenses of ChatGPT.
“They’re after consumer productivity and consumer search. API shouldn’t be a high-margin business,” the person added.
Friar noted that promoting models have drawbacks, including the incontrovertible fact that they’re sensitive to fluctuations within the broader economic cycle and that they have an inclination to shift an organization's focus from satisfying its users to its advertisers.
“I’m not ruling out (promoting),” she said. “But right away there’s lots of little fruit in the way in which we do things.”
