OpenAI's announcement that it will place advertising into its free and mid-tier Go offerings is drawing scrutiny from market analysts who see the move as more than a simple monetization step. Needham & Company described the change as a "fundamental re-calibration of the intent-based economy" that has been historically led by Google and Meta.
The brokerage highlighted the mechanics of the rollout: ads in the affected ChatGPT plans will be sold on a cost-per-thousand-impressions, or CPM, basis rather than using performance-based pricing structures. Needham argues that the scale OpenAI has amassed gives the initiative immediate economic relevance.
Needham cited an estimate of 800 million weekly active users for OpenAI's service and calculated that, contingent on execution, the company could capture up to $20 billion in advertising revenue per year within the next five years. The firm framed advertising as necessary for OpenAI both to offset "high costs of AI compute, infrastructure, and growth" and to establish a meaningful second revenue stream that could support a higher valuation multiple.
Crucially, Needham noted that if OpenAI achieves that revenue scale, "at least some of it must come from the Walled Gardens," explicitly naming Google, Meta and Amazon. The brokerage referenced the U.S. open internet ad market as roughly $50 billion, suggesting the potential for significant reallocation of ad spend among major players.
To examine the competitive implications, Needham will host a call with Phillip Thune, CEO of Adthena, a firm focused on online search. Thune's team has observed material changes in Google's AI Overviews, according to Needham, and provided data intended to illustrate how AI interfaces are altering user behavior.
One of the data points Needham highlighted from Adthena indicates that AI-generated answers can reduce click-through rates to websites by 20 to 40 percent. Needham emphasized that this decline in clicks underscores the disruptive potential of AI-driven responses to search and information queries.
From an investor perspective, Needham identified two critical questions: will advertisers regard ChatGPT's CPM-based placements as more attractive than existing Google ad formats, and which incumbent platforms are most likely to cede share as AI-generated interfaces reshape user intent and the value of ad placements? These questions will guide scrutiny of market share movements and ad pricing dynamics as OpenAI rolls out its advertising offering.
Note: The analysis above presents the conclusions and data points as communicated by the cited research and industry participants. It reflects the current public statements and estimates and does not introduce additional forecasts or outside information.