OpenAI’s commerce flop makes advertising critical to its $125 billion future
Last week, OpenAI backed away from its ChatGPT Instant Checkout shopping function, reportedly shelving the product just five months after announcing it. Mutinex co-founder and Mumbrella columnist Henry Innis here argues that the implications for the AI platform’s advertising product — and therefore for marketers — are profound.
All dollar figures below are USD.
Long way to go: OpenAI has four years to grow revenues by US$105m (image from a ChatGPT ad)
OpenAI reported $20 billion in annualised revenue for 2025. They’re targeting $125 billion by 2029. The gap between those two numbers is a bet that a company built on subscriptions can reinvent itself as a diversified commercial platform across four years while burning through $115 billion in cash to get there.
The fate of that diversified commercial platform now lies with advertising and the marketers who control advertising spend. OpenAI’s abandonment of its nascent shopping platform last week left advertising as the single remaining mechanism that can plausibly bridge the gap to its $125 billion future.
OpenAI, which once derided advertising, must become an advertising company or fail to hit its target and justify its insane valuations.
To understand why, you need to start with something that doesn’t get discussed enough: OpenAI, Anthropic, and Google are not running the same business. They are running three fundamentally different businesses with diverging unit economics — and OpenAI really drew the short straw on which one it ended up with.
It should be obvious to everyone that the valuation is absurd. Another tech-wreck is coming.
“Basically: they need to make GPT much better than it is today”
Would the alternative play not be to make the free version of GPT much more limited in its scope? If 95% of users are using your product free and you have that enormous user base already, it seems like there are plenty of plays to double the paying user base.
But I guess you then inhibit your advertising play if you wind up reducing the free user base. We watch on with interest …
Henry, this article was excellent. Job well done.
Cheers,
Ben Sulka