OpenAI made its debut at the Cannes Lions advertising festival this week, but it did not book a beach club on the Croisette alongside Meta, Amazon, and Google. Instead, the company summoned reporters and agency executives to a semi-secluded villa near the harbour, a staging choice that doubles as metaphor: OpenAI is in the ad business, just not in the way the incumbents are.

The pitch was led by David Dugan, a former Meta executive who spent more than twelve years as vice president of global clients and agencies before joining OpenAI as VP of advertising earlier this year. He told attendees the company has already attracted “thousands of advertisers” and that the strongest-performing categories are travel, retail, health, beauty, and financial services.

The revenue gamble

OpenAI began testing sponsored links at the bottom of ChatGPT responses on 10 February, starting with free-tier and Go-plan users in the US. The ads have since expanded to seven countries, including the UK, Canada, Australia, New Zealand, Japan, and South Korea, with plans to add Brazil and Mexico in the coming weeks.

The effort sits inside a much larger financial bet. Axios reported in April that OpenAI has projected $2.5 billion in ad revenue for 2026, rising to $11 billion by 2027 and $100 billion by 2030.

Dugan declined to comment on those figures at Cannes.

To reach that target, OpenAI would need to capture roughly a tenth of the global digital advertising market within four years, a market currently dominated by Google, Meta, and Amazon. The company’s pitch rests on a simple proposition: chatbot users volunteer exactly what they want, which means ChatGPT could deliver the highest-intent ad surface on the internet.

Early cracks in the model

The early data, however, tells a more complicated story. OpenAI launched its ad pilot at a $60 CPM, a premium rate that reflected scarcity and novelty.

Within ten weeks, that figure eroded to as low as $25, and the company shifted its pricing model to cost-per-click bidding with bids between $3 and $5.

The ad pilot crossed $100 million in annualised revenue in under two months with fewer than 600 advertisers. OpenAI opened a self-serve ads manager on 5 May with no minimum spend, a move designed to scale advertiser volume but one that also signals the initial premium pricing could not hold.

At Cannes, agencies were polite but cautious. Michael Cohen, an executive at Horizon Media, said the firm is “still in the early stages of investment” and that the focus is “a little bit less on maximising performance today and more on learning alongside OpenAI as the platform evolves.”

The format question

Benji Shomair, OpenAI’s vice president of monetisation and another former Meta executive, said the company is already experimenting with ad formats beyond sponsored links, though he was not ready to announce specifics.

He offered a hypothetical: a user asking the chatbot how to fix a squeaking door might benefit from a video ad for a hinge lubricant.

“If there’s a product like a grease for the hinge, actually would a video explaining how it works be helpful? Maybe,” he said.

The gap between that vision and what agencies can currently buy is substantial. Omnicom’s chief technology officer Paolo Yuvienco described OpenAI’s ad effort as “relatively successful” but “immature to a certain degree,” noting that agencies buy ad placements in milliseconds while it still takes seconds to generate an AI response.

The competitive landscape

OpenAI’s move into advertising is being watched closely because it breaks a tacit consensus among AI companies that chatbot ads are premature. Anthropic used a Super Bowl ad in February to declare that Claude would remain ad-free, framing the decision as a matter of trust: “Users shouldn’t have to second-guess whether an AI is genuinely helping them or subtly steering the conversation towards something monetisable.”

Google has denied current plans to bring ads to its Gemini chatbot, though SVP Nick Fox has since said the possibility is “not ruled out.” The company already runs ads in AI Overviews and is testing them in AI Mode, which means the question is not whether Google will monetise AI-assisted search but how quickly it moves beyond its existing surfaces.

Why it matters for the IPO

The advertising push is inseparable from OpenAI’s path to a public listing. The company spent $34 billion in 2025 against $13 billion in revenue and does not expect to reach profitability until 2030.

It filed confidentially with the SEC on 8 June, targeting an autumn debut at a valuation that could exceed $1 trillion.

Advertising revenue is the lever OpenAI needs to convince public-market investors that it has multiple revenue streams beyond subscriptions and API access. ChatGPT’s user base, which crossed one billion weekly active users in May 2026, gives it the scale.

What it lacks is proof that the ad model converts at rates that justify the projections.

The company’s $100 billion target assumes ChatGPT’s products will reach 2.75 billion weekly users by 2030, nearly triple the current figure, and that the AI advertising market will grow large enough for a newcomer to take a meaningful share from Google and Meta.

The trust problem

The deeper challenge is whether advertising inside a conversational AI degrades the product itself. OpenAI says it will not allow money to influence ChatGPT’s answers and will keep conversations private from advertisers.

Plus, Pro, Business, Enterprise, and Education subscribers will remain ad-free.

But the company’s own pricing trajectory suggests the market is still working out what a ChatGPT ad is actually worth. A CPM that halves in ten weeks is not the behaviour of a product that has found its fit.

It is the behaviour of a product that is still searching for it, from a villa hidden behind the bushes at the industry’s biggest party.