Up until now, people believed AI would be cheap (or even free). But that’s no longer true. A few days back, OpenAI made an important move toward making money with AI. ChatGPT has had two tiers of usage: ad-supported, free and “go” tiers; one paid tier with no ads. So it is very clear now that operating AI this large will cost a lot of money, and cannot be sustained by additional revenue without advertisement revenue.
This change didn’t happen overnight, but was the culmination of mounting pressure due to escalating computer costs, a rapid increase in the number of users, and the fact that subscriptions alone cannot cover the costs anymore.
To fully understand this change, you must examine how AI is performing at a high level on their back end, and how other companies are monetizing their AI-based platforms using advertising, as well as how these changes will affect you. Let’s try to understand why OpenAI introduced ChatGPT ads.
What does “AI monetization” actually mean for ChatGPT users?
Monetization through AI involves developing ongoing sources to fund the systems indefinitely without compromising access.
ChatGPT now has three ways in which revenue is generated:
1) Advertising on both FREE/GO Plans
2) Subscription-based for Plus/Pro users
3) Enterprise/API Sales to companies
The vast majority of users are not paying – thus the imbalance between paying vs non-payment caused OpenAI to change its business model.
The introduction of ads enables OpenAI to monetize the attention rather than exclusively monetising through user fees. The model is similar to what people have come to accept in the Music and Video industries.
Why is it so expensive to run AI at ChatGPT’s scale?
Artificial Intelligence is not powered by magic; it is powered by computers (servers), computer chips ( silicon chips ), and people ( talent / skill set ).
Every chat session relies upon:
- High-end Graphics Processing Units
- Large Data Center Locations
- Continued Training of the Model
- Safety System(s) and Monitoring
The smarter the AI gets, the higher the costs associated with using the AI will be, even if the user thinks their answer has come immediately ( instantaneously ). OpenAI will invest tens of billions of dollars into technology to continue to develop their models and, although subscription services help, they cannot cover the entire cost of developing AI models.
Therefore, AI monetization had to happen.
Why didn’t subscriptions alone solve the problem?
In theory, subscriptions seem appealing but not so much when you actually put them to use.
Here’s why:
- Most users utilize ChatGPT casually.
- Most users do not require advanced limits.
- Most users prefer to avoid monthly payments.
This creates a large user base producing cost but generating very little revenue. With ads, even regular users can now support the infrastructure of a system. Paid customers continue to enjoy a cleaner experience, while free customers retain access.
Many platforms will ultimately make this same trade.
How does OpenAI’s monetization compare with other AI companies?
OpenAI is not acting alone. Every major AI player faces the same pressure.
Here is how the field stacks up:
| Company | AI Product | Monetization Model | Core Focus |
|---|---|---|---|
| OpenAI | ChatGPT | Ads + subscriptions | Scale and access |
| Gemini | Ads tied to intent | Search integration | |
| Microsoft | Copilot | Enterprise subscriptions | Productivity revenue |
| Meta | Llama apps | Ads inside experiences | Attention at scale |
Why introduce ads now instead of later?
Timing is key.
In 2026, ChatGPT realized record levels of weekly traffic use. At this level, 2 things opened up:
(i) Interest from advertisers
(ii) Predictable behaviors from users
However, simultaneously, infrastructure costs had dramatically risen. If we had waited longer to introduce ads, we would end up with deeper losses. By introducing ads now, OpenAI can establish how to work with the ads as opposed to being subject to creating bad habits. It also demonstrates discipline to partners and investors. This is doing strategic monetization with AI, not panic.
Do ads change how ChatGPT answers questions?
A primary concern among users.
OpenAI has said:
- The ads will not affect how accurate your answers are
- All sponsored content will be clearly marked
- There will never be ads on topics that may be considered sensitive
- Advertisements will be shown around discussions, not within the conversation itself. This is important to building trust.
If those two things ever get confused users will stop using the application, OpenAI knows that too.
Why not charge everyone a small fee instead of using ads?
A global fee appears reasonable. It may create barriers for users.
Many users:
- Live in poorer areas of the world;
- Utilize ChatGPT for learning;
- Do not require it on a daily basis;
Advertised access allows for the opportunity to reach a global audience without upfront costs. Continuation of subscription as an option only continues to allow this model to support reach when training, feedback and usage all continue to increase together in size. This shift also raises important questions about how ads inside ChatGPT affect creators, visibility, and trust, which we break down in detail in our analysis of ChatGPT advertising’s impact on creators.
Wrapping it up: What does AI monetization really signal?
This transformation will go far beyond just advertising – it signifies a transition towards AI reaching full maturity as a viable technology. We are beyond testing AI; we now view it as an important part of our infrastructure.
The method of monetization will be what allows the infrastructure to persist. When monetized properly, it helps the tools available to be opened, rather than locked down by paywalls.
OpenAI’s actions indicate the future direction of the industry. The majority of success will be in hybrid models. Free access to tools will remain available to people. The true currency in the future will be trust. The method of AI monetization will dictate who will continue to exist in the future.
