Amazon partners with OpenAI to sell ads in ChatGPT

Amazon Amazon.com, Inc. ↘ 0.35% and OpenAI announced a partnership on Thursday to let Amazon advertisers run ads inside ChatGPT, marking a major expansion for both the e-commerce giant's advertising reach and the AI company's fast-growing ad business.

The pilot program, limited to select U.S. brands at launch, allows advertisers using Amazon's demand-side platform to buy ad inventory within the ChatGPT app. Delta Vacations is among the first brands testing the integration. Ad units will appear as text or images beneath ChatGPT responses, with Amazon managing campaign setup while OpenAI's systems control all ad delivery decisions.cnbc+1

A Milestone for Both Companies

ChatGPT's ad business, which launched in February with retailers like Best Buy ↗ 0.23% and Williams-Sonoma ↘ 1.76%, recently reached a $1 billion annualized revenue run rate. OpenAI says ChatGPT now has 900 million weekly active users. Amazon, which operates the third-largest digital advertising platform and neared $70 billion in ad revenue last year, had already quietly become the top retail company advertising on ChatGPT between April and August, according to data from Sensor Tower.marketingdive+1

"Conversational ads represent the fastest growing engagement opportunity for brands to reach new and existing audiences," said Chris Conetta, director of omnichannel supply at Amazon DSP. Campaigns will be available on both a cost-per-click and cost-per-mille basis, with advertisers receiving aggregated performance data on impressions, clicks, and related metrics.digiday+1

Competitive Tensions

The deal arrives alongside a separate policy shift at OpenAI. The Information reported that OpenAI has begun restricting ads for competing AI image and audio products on ChatGPT, a move that caught advertisers including Adobe ↘ 2.90% off guard. The restriction could limit OpenAI's ad revenue but signals its intent to protect its own product offerings as it builds out its advertising operation.seekingalpha+1

OpenAI has previously partnered with ad technology firms Criteo ↗ 0.26% and StackAdapt, as well as retail media networks operated by Target ↗ 0.29% and Albertsons ↘ 3.40%, but Amazon's platform is considerably larger. The company is reportedly aiming for $100 billion in ad revenue by 2030.digiday+1

What Comes Next

Despite the momentum, analysts caution that OpenAI's ad infrastructure remains early-stage. "They're still trying to build out even many of the basics of a functional ad sales operation, including their team, technology, vendor partnerships, ad formats, and pricing," said Nate Elliott, principal analyst of AI at eMarketer. Whether the Amazon partnership can accelerate that process — or whether measurement gaps and limited formats will slow adoption — may determine how quickly OpenAI's advertising ambitions take shape.digiday