OpenAI, eyeing IPO, sees ad revenue surge to $1 billion annualized

[Financial News New York = Lee Byung-chul]OpenAI has reached an annualized revenue run rate of $1 billion, about 200 days after launching its ChatGPT advertising business. As its valuation has climbed to as much as $852 billion, the company is preparing for a large-scale initial public offering (IPO) and is developing advertising into a new core revenue stream alongside subscriptions and enterprise services.
According to CNBC on the 31st local time, OpenAI said the annualized revenue run rate from its ChatGPT ad business has exceeded $1 billion. That figure represents the annual revenue level implied if the recent pace of ad sales continues for a full year. OpenAI described it as "a milestone that proves a diversified business model."
OpenAI is currently preparing for a large IPO while being valued at $852 billion. With profitability seen as a key challenge to support that massive valuation, advertising is emerging quickly as a new revenue pillar, following enterprise services, consumer subscriptions, and usage-based application programming interfaces (API).
OpenAI began testing ChatGPT ads in the United States in February. The ad service has since expanded to more than 40 countries, and from today it is broadening self-service tools that allow advertisers to run campaigns directly in India, Europe, the Middle East, and North Africa.
Ads are shown to free ChatGPT users and subscribers to lower-priced plans. They account for most of ChatGPT's 1 billion weekly active users. That vast user base has become a major driver of the ad business's rapid growth.
OpenAI said, "In the next phase of growth, we will expand ChatGPT ads into more markets and introduce new ad formats, buying methods, and performance measurement tools." It added that ads will be clearly labeled, will not affect ChatGPT's responses, and will not give advertisers access to users' private conversations.


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