Why OpenAI is ‘running at lightning speed’ to build an ad business

That’s a lot for a company that only launched an ads business two months ago. The breakneck clip at which OpenAI is moving begs the question: Is OpenAI moving too fast with their ads? 

“It seems like at this point, they’re running at lightning speed,” Krystal Scanlon, senior platforms reporter at Digiday said. Scanlon joined the latest episode of the Digiday Podcast to discuss OpenAI’s ad business roadmap. She added, “In one sense, it’s almost like they have to catch up, and catch up fast.” 

Stacked cards

To Scanlon’s point, OpenAI is facing stiff competition. Sure, it’s wading into a somewhat uncharted territory — monetizing an AI chatbot. But Google is in the same boat and it’s got more paddles. Google already has a search ad business that can immediately port into AI. 

Meta, too, is back in the game with climbing ad revenue amidst its AI push.

At the same time, OpenAI is burning through cash. The company predicts it’ll blow through at least $111 billion through 2030, per The Information. That makes a successful ad business all the more important. 

Advertising is a proven path for consistent revenue, a must to sustain OpenAI, especially if the company plans to go public this year. These are lessons other tech behemoths learned long ago.

Pre-written playbook

One could argue that Meta wrote the playbook that OpenAI has taken a page out of for its own ad business. One could also argue that’s why the AI platform hired Meta veterans like Fidji Simo — and most recently, Dugan, a longtime ads leader at Meta and OpenAI’s current vp, head of global ad solutions. 

“They have a playbook that they can use, and then obviously add their own thrills, bells and whistles and anything to make it an OpenAI stand,” Scanlon said. 

The monetization playbook already exists. While Meta and TikTok took years to launch their ad platforms, OpenAI benefits from a guide that already exists, has been pressure tested and proven successful.

Perhaps, the question is if OpenAI is moving fast enough, making the platform’s next steps critical. That’s everything from revamping its pricing model to owning its own tech stack instead of relying on partnerships to really make it a standout in the digital ad ecosystem. 

“Weirdly, it takes me back to what [Meta CEO] Mark Zuckerberg said years ago: Move fast and break things. That’s the end of it,” Scanlon said. It seems OpenAI is already heeding Zuckerberg’s advice in the race to successfully monetize generative AI. 

“Why not? Nothing at the moment is stopping [OpenAI] because they are the frontrunners,” she said.