Analysts Predict OpenAI's Ad Business Will Fall 90% Short of Its Own Projections

According to Emarketer data, OpenAI's advertising business is expected to fall roughly 90% short of its own five-year revenue projections. OpenAI is targeting $2.5 billion in ad revenue this year and $100 billion by 2030, but actual projections suggest it will reach only under $1 billion this year and $5.41 billion by 2030.

This gap stems from OpenAI's optimistic assumptions that it will absorb a large share of the existing search advertising market's budget and dominate the mature chatbot advertising market. However, AI assistants currently account for only 8% of digital ad spending, and most AI-related ad spending is expected to concentrate on AI content within search results, such as Google AI Overviews, rather than on chatbots themselves.

OpenAI is pursuing the following strategies to expand its ad business:

• Enhancing ad products: Introducing oCPC (conversion-optimized ads), which goes beyond click and conversion metrics to adjust bids by predicting conversion likelihood
• Expanding the advertiser pool: Lowering the minimum spend requirement from $250,000 to $50,000 to target small and medium-sized businesses
• Forming partnerships: Collaborating with major ad platforms such as Criteo, StackAdapt, and LiveRamp to expand purchasing channels

This uncertainty around the ad business is becoming controversial, as it coincides with aggressive projections OpenAI is setting to justify its valuation ahead of its planned IPO.