GoKawiilAI Fail: At first, AI companies such as OpenAI had sworn they would never show advertising on their chatbot-powered online services. Now, everyone is doing the exact opposite. But according to recent research, industry players are unlikely to earn much from the new ad-supported market.
A new market analysis by consulting firm Emarketer casts a very dark shadow over OpenAI's advertising revenue targets. Sam Altman's company started showing ads to ChatGPT users earlier this year in an attempt to finally monetize its LLM-based service. Emarketer's research allegedly confirms that the company's internal advertising targets have been significantly higher than its actual results.
OpenAI said it expects to generate $2.5 billion in advertising revenue by the end of this year, while setting its sights on a massive $100 billion revenue target by 2030. Emarketer's study suggests that OpenAI's advertising revenue could fall 90% short of its 2026 target, and that's just the first piece of bad news in a long series of setbacks for AI companies looking to generate meaningful revenue from advertising.
Emarketer estimates that OpenAI, Microsoft, Google, and the rest of the AI-focused industry will collectively generate $1 billion in advertising revenue by the end of the year. OpenAI, by comparison, said it expects to generate $2.5 billion in ad revenue on its own. Even worse, the global advertising revenue potential for the entire "AI industry" is expected to reach just $5.41 billion by 2030.
Analysts concede that OpenAI's advertising revenue goals are not impossible, just highly unlikely unless massive changes in customer behavior turn the traditional advertising market upside down.
First, OpenAI could indeed see its advertising revenue skyrocket if advertisers completely abandon search engines such as Google, social media, and other traditional channels in favor of a fully chatbot-based advertising experience.
Then, the ChatGPT maker would need to overcome the competition in this new ad-driven business to reach its expected $100 billion revenue target within five years. In theory, OpenAI expects advertising to account for a third of its projected future revenue.
Will math and financial speculation finally overcome market realities, turning the chatbot business into a money-printing machine, just as AI companies have promised for years? AI evangelists such as SoftBank boss Masayoshi Son are still willing to bet on the future of the AI business, even as early chatbot proponents such as OpenAI could eventually burn hundreds of billions of dollars by 2030.