When AI starts "selling products," JPMorgan explains in detail the monetization logic behind ChatGPT's ad testing.

When AI starts "selling products," JPMorgan explains in detail the monetization logic behind ChatGPT's ad testing.

Formally bidding farewell to the era of “free lunch,” OpenAI has finally pressed the button for advertising monetization. JPMorgan believes that with ChatGPT announcing it will start testing ads in the coming weeks, this AI giant has taken a key step in shifting from reliance on a subscription-only model to diversified commercial monetization.

On January 24, JPMorgan stated in its latest report that on January 16, OpenAI announced it will begin testing ads in the free and Go (lightweight subscription) versions of ChatGPT in the coming weeks, marking a substantial change in its monetization strategy.

The report says that this shift is not incidental—faced with the reality that 95% of nearly 1 billion weekly active users are free users, and with a commitment to spend $1.4 trillion in infrastructure over the next eight years, ad revenue has shifted from an option to a commercial necessity.

JPMorgan analysis points out that ChatGPT’s ad model will differ from traditional social platforms’ “attention economy”, instead capturing high commercial intent from users to obtain higher eCPM. About 12% of ChatGPT queries are of a search nature, and users show strong purchase intent.

The bank believes that this strategy is not only aimed at opening new revenue streams, but also at building a clear value ladder including Free, Go ($8/month), Plus ($20/month), and Pro ($200/month), using the advertising experience to push users toward paid tiers.

At the same time, JPMorgan observes that as the first mainstream large language model provider to test ads in consumer-grade applications, OpenAI’s move may affect its user growth rate and competitive position, but management discipline, brand awareness, and user stickiness will support it through the test period.

Commercialization’s “Three Drivers”: Advertising is Inevitable

JPMorgan believes that OpenAI’s deployment of ads is a commercial inevitability based on three key factors:

  • First is the massive free user base. Of ChatGPT’s roughly 900 million weekly active users (WAUs), about 95% are free users; maintaining such a large user group is costly in the absence of a “freemium” conversion model.
  • Second is the staggering capital expenditure pressure. OpenAI has committed to spending $1.4 trillion over the next eight years on AI infrastructure. Subscriptions and API revenue alone are insufficient to cover these huge expenses.

According to The Information's data, the company urgently needs to generate over $10 billion in additional income from ads and shopping businesses by 2027.

  • Lastly is the rising commercial intent. Data shows that around 12% of ChatGPT queries are search-related, and users increasingly rely on AI for product research and advice, creating a natural scenario for ad placements.

Reconstructing Monetization Logic: From Competing for “Attention” to Capturing “Intent”

JPMorgan believes OpenAI’s ad strategy will focus on “user intent” rather than “user attention”. Unlike social platforms, which monetize by maximizing user time spent, OpenAI’s principle is “not to optimize for ChatGPT usage time”.

This means ads will be displayed mainly for queries that show clear purchasing signals (such as product searches, comparison requests). If executed well, this precise high-intent matching can yield higher conversion rates and eCPM than traditional display ads, while preserving user trust.

JPMorgan expects this model to attract advertisers seeking high ROI, especially those hoping to use conversational AI to target the lower funnel.

Implementation Path: From Experimental Budgets to Industry-Wide Adoption

The report points out, according to media reports, testing will start in early February, initially only for a few advertisers, each pledging less than $1 million and using a per-view rather than a per-click payment model.

JPMorgan predicts that in the initial phase, OpenAI will mainly attract “experimental budgets” to build proof of concept. Main targets are advertisers from platforms like TikTok, X, SNAP, etc., which account for about 13% of US digital ad spending.

If OpenAI proves its conversion advantage, it may in the future compete with giants like Google, Meta, and Amazon for budgets in core verticals such as retail (~$115 billion), FMCG (~$65 billion), automotive, and financial services.

Additionally, OpenAI faces a choice: to build its own or buy existing ad infrastructure.

The report says that while building proprietary ad tech (DSP/SSP, attribution measurement) is more economical long-term, it takes time; partnering with existing giants like The Trade Desk or Google Ad Manager can accelerate implementation, but with lower margins and less control. Based on management’s background, JPMorgan leans toward OpenAI choosing to build in-house.

Tiered Pricing Strategy: Using Ads to Push Paid Conversion

Another major strategic intent behind introducing ads is to reshape user segmentation. JPMorgan analysis suggests that a major goal for testing ads in 2026 is to push free users to the $8/month Go tier.

JPMorgan believes that by displaying ads in the free and Go versions, while keeping Plus, Pro, and enterprise versions ad-free, OpenAI has created a clear value ladder.

This move aims to raise the free-to-paid conversion rate from the current ~5% to 7-8% (upper bound of single digits). This will not only boost subscription income but also filter for high-value users, optimizing overall revenue structure.

The report states, citing The Information’s data, that OpenAI’s revenue goals are highly ambitious: its 2026 total revenue target is $30 billion, of which about $2 billion comes from non-paying users (ads, shopping, etc.). The 2027 total revenue goal doubles to $60 billion, with non-paying user income surging to ~$11 billion.

Competitive Landscape: Breaking Out from Under Google Gemini’s Shadow

Although OpenAI currently accounts for about 60% of mobile AI app downloads, competitive risks remain.

The report points out that Google Gemini, with its strong position in search, mature ad model, and massive data advantage, remains the main threat. Moreover, Gemini hasn’t introduced ads yet, putting some user experience pressure on OpenAI.

However, JPMorgan notes that OpenAI’s management has always stressed “trust over short-term monetization.” Altman has stated that ads will be handled with great care. The company has released a series of ad principles, including content independence, privacy protection, and user control, helping preserve the core experience during testing.

Given OpenAI’s enormous lead in brand awareness and user engagement, JPMorgan believes risks of users switching to competitors like Claude or Grok are relatively controllable.

 

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