OpenAI's ad business hits $1 billion annualized revenue run rate

Aug 31 (Reuters) - OpenAI on ‌Monday said ​ChatGPT ​Ads, the company's advertising business, has reached $1 billion in annualized revenue run rate, as adoption picks up ‌and global expansion rolls out.

The company started testing ads ⁠in ChatGPT U.S. earlier this year and has steadily expanded to ‌add advertisers and tap into ‌more markets, as it banks on advertising to boost overall revenue growth ahead of a potential IPO.

Here are more ​details:

• Starting on Monday, advertisers across India, Europe, the Middle East and North Africa can purchase ChatGPT ads directly ⁠via OpenAI's Ads Manager — a tool it has already rolled out in the United ​States.

• Ads Manager has been helpful in drawing small- and medium-sized businesses (SMBs) to advertise on ChatGPT, ​the company said, adding that SMBs ‌now represent a "material share" of its ads business.

• OpenAI said advertisers outside the U.S. represent a ⁠growing share of revenue, without disclosing further details.

• OpenAI has been displaying ads to users on ChatGPT's free tier and the lower-priced ⁠Go plan. In April, OpenAI had said its ads pilot in the ​U.S. crossed $100 million in annualized revenue within six weeks of its launch.

• For OpenAI, competing in the advertising industry means challenging the dominance ‌of Alphabet's Google and Facebook parent Meta, both of which rake in hundreds of billions in ‌ad revenue annually.

• OpenAI confidentially filed for a U.S. initial ⁠public offering earlier this ‌year, with the company ​reportedly expected to go public in 2027 or sooner.

(Reporting by Deborah Sophia in Bengaluru; Editing by Maju ‌Samuel)

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