TLDR
- OpenAI expects to burn through $17 billion in 2025 after losing $9 billion in 2024, raising questions about its business model sustainability
- The company announced plans to test advertising in ChatGPT’s free and low-cost tiers starting in the United States, despite CEO Sam Altman previously calling ads a “last resort”
- OpenAI generated over $20 billion in revenue in 2025, up from $6 billion in 2024, but only a fraction of its 800 million weekly users are paying subscribers
- The company is expected to go public in late 2026 or early 2027, with a potential valuation topping $1 trillion following $22.5 billion in funding from SoftBank
- Experts warn that AI chatbot advertising raises different concerns than social media ads because users share intimate information and seek personal advice in private conversations
OpenAI is preparing to introduce advertising to ChatGPT as the artificial intelligence company struggles with mounting costs and investor pressure ahead of a potential public offering. The move marks a reversal from CEO Sam Altman’s 2024 statement that ads would be a “last resort” for the company’s business model.
The company announced on January 16 that it will soon test ads in the United States. Advertising will appear in ChatGPT’s free version and the lower-cost Go tier but not for Pro, Business, or Enterprise subscribers.
OpenAI burned through $9 billion in 2024 and expects to spend $17 billion in 2025. The company has committed to data center projects worth $1.4 trillion while only a fraction of its 800 million weekly users pay for the service.
Deutsche Bank analysts called 2026 a “make or break” year for AI foundation model companies. They wrote that OpenAI appears “particularly extended” and may be most at risk among AI companies that sell models as their primary business.
Revenue Growth and Investor Concerns
OpenAI’s revenue grew to over $20 billion in 2025, up from $6 billion in 2024, according to financial chief Sarah Friar. The company secured $22.5 billion from SoftBank at the end of 2025, adding to $40 billion already committed by the investment firm.
The company has partnerships with Nvidia and Microsoft. Its potential valuation stands at $500 billion, with analysts forecasting it could top $1 trillion after a public offering expected in late 2026 or early 2027.
However, Deutsche Bank analysts noted OpenAI’s competitive position is “relatively shallow” compared with larger tech companies whose AI efforts are supported by other profitable business lines. They wrote that “its path to success appears to be looking narrower and narrower.”
A January 12 decision by Apple to power its AI products with Google’s technology instead of OpenAI represented a setback for the company. The choice highlighted intensifying competition in the AI market.
Advertising Safeguards and Concerns
OpenAI says ads will be clearly separated from chatbot responses and will not influence outputs. The company promises not to sell user conversations and will let users turn off personalized ads.
The company also pledged to avoid showing ads to users under 18 or around sensitive topics including health and politics. OpenAI has not provided details on which advertising categories will be included or excluded beyond these restrictions.
Privacy advocates warn that AI chatbot advertising differs from social media ads. Raffaele Ciriello, a business information systems researcher at the University of Sydney, noted people use chatbots for advice, emotional support, and private reflection.
Messages placed beside personalized guidance about products, lifestyle choices, finances, or politics may be more influential than ads seen while browsing social media. The conversational format and perceived privacy of chatbots could amplify the persuasive power of advertising.
Industry Pressure and Competition
PitchBook analyst Dimitri Zabelin said investor scrutiny is shifting from scale to returns. The key question is whether enterprise sales, pricing power, and declining costs can outpace rising compute intensity.
Zabelin noted OpenAI maintains unusually deep access to strategic compute and capital partners through multi-year capacity agreements. The company benefits from regulatory support as it embeds itself in government operations domestically and overseas.
Competitor Anthropic, founded by former OpenAI employees, is rumored to target a public listing potentially in 2026. Deutsche Bank analysts said Anthropic may fare better than OpenAI due to slower cash burn, popularity with paying enterprise customers, and dynamic pricing.
The analysts expressed doubt about smaller independent AI companies surviving. They said it may prove “almost impossible” for such companies to afford accelerating compute costs and predicted some could be acquired by larger tech companies by year’s end.
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