AI Business Models.

In this model, the AI product is free to use and advertisers pay to appear next to the answers. It's the oldest model on the consumer internet, and it's now arriving in AI. OpenAI began testing ads in ChatGPT's Free and $8 Go tiers in early 2026^1,2, and says its ad business passed $1 billion in annualized revenue by the end of August³. Google's Search revenue grew 19% in the first quarter of 2026 as AI Overviews and AI Mode spread⁵. The catch is that every answer costs compute, and ads that make users doubt the answers can destroy the product.

Ads have to pay for the compute

In classic search or social media, serving one more page costs almost nothing. In AI, every answer runs a model. That means the ads shown across a set of queries have to cover the compute for all of them, including the many that never show an ad. Sherwood News, a business news site, reported that ChatGPT ads cost advertisers about $60 per thousand views². Since May 2026, advertisers can also pay per click¹¹. Ad platforms usually sell both ways at once, and each advertiser chooses by campaign. OpenAI frames ads as a way to fund free use, so that "more people can benefit from our tools with fewer usage limits or without having to pay"¹. That's the subsidy loop on the map: ad revenue pays for better free usage, which brings in more users.

Commercial intent is the inventory

Not every question can carry an ad. The valuable ones show buying intent, like shopping, travel and local services. OpenAI won't show ads near sensitive or regulated topics such as health, mental health and politics, and won't show them to users it believes are under 18¹. Sherwood News gives an example of how it works: a question about running technique might show a sneaker ad, but the answer won't steer toward that brand². Users who rarely ask commercial questions still cost compute, which is why the map shows them as a drop-off from the money side of the model.

Ad sales is the other half of the business

This is a two-sided market. Users create the inventory, which is every commercial question multiplied by how many ads the product is willing to show. Advertisers buy it, and an auction matches each placement to a campaign. Both sides have to grow together. Inventory nobody buys is compute with no revenue, and advertisers with nowhere to spend go elsewhere. Sizing that inventory and then finding advertisers to fill it is our inference about how it works; OpenAI hasn't described how it forecasts ad capacity.

OpenAI is building the sales side like a media company. In March 2026 it hired Dave Dugan, formerly Meta's vice president of global clients and agencies, to run global ad solutions, according to Skift, a travel industry news site¹⁰. By May, it had opened a self-serve Ads Manager to all US businesses, dropped a $50,000 minimum spend and added pay-per-click buying, Quartz, the business news site, reported¹¹. In October, Adweek, the advertising trade publication, reported that OpenAI is hiring to build relationships with agency holding companies, so ChatGPT becomes a regular line in their clients' media plans¹². Big brands come through a sales team and their agencies, and smaller advertisers serve themselves.

Trust is the constraint

OpenAI promises that "ads do not influence the answers ChatGPT gives you" and that it keeps conversations private from advertisers¹. Others have decided the risk isn't worth it. Perplexity, the AI search engine, stopped taking new advertisers in October 2025 and has since stepped away from ads. One Perplexity executive explained that with ads, "a user would just start doubting everything." The polling firm Ipsos found that 63% of US adults say ads in AI search results make them trust the results less, and Anthropic has committed to keeping Claude ad-free⁴. That's why the map has a trust drop-off: if users think the answers are for sale, they leave or pay to remove the ads.

Shopping is the other way to cash in on intent

Ads aren't the only way to earn from buying questions. In September 2025, OpenAI launched Instant Checkout, which let ChatGPT users in the US buy from Etsy sellers without leaving the chat, with more than a million Shopify merchants "coming soon." OpenAI said product results were "organic and unsponsored, ranked purely on relevance to the user," and that merchants would pay a fee on completed purchases⁷. For Shopify merchants, eCommerceNews, a retail technology news site, reported that fee as 4% of each sale, starting in late January 2026⁸. By March 2026, OpenAI was scaling back Instant Checkout to focus on search and product discovery. Shopify's Agentic Storefronts now list merchants' products in ChatGPT by default, but shoppers usually finish buying on the merchant's own site. Modern Retail, a trade publication, noted it's still unclear how many shoppers are comfortable paying inside a chat⁹. A cut of each sale can be worth more than an ad, but only if people will buy where they ask.

Most ad-supported AI sits beside a subscription

OpenAI says it will always offer a paid tier without ads, and its Plus, Pro, Business and Enterprise plans don't show them¹. So ads mostly fund the free and cheapest tiers, with subscriptions (model 2) above them. Smaller AI apps reach advertisers through new ad networks. Koah, one of these networks, places ads inside apps like coding assistants and meal-planning chatbots and takes a 30% cut², with clients including Luzia, Liner and DeepAI⁶. ZeroClick, started by Honey co-founder Ryan Hudson, raised $55 million to build one⁶. Amazon is testing ads inside Rufus, its AI shopping assistant².