Amazon extends its $70 billion ad business into OpenAI's ChatGPT

OpenAI's advertising business crossed a $1 billion annualized run rate in early September, and the company is privately targeting $100 billion by 2030 ^[6][7]. Compounded over the roughly four years to that date, 100-fold growth works out at about 3.2 times a year, or near 216% annually ^[15]. Amazon's advertising segment turned over more than $70 billion on a trailing 12-month basis this year ^[5]. OpenAI's 2030 target is about 1.4 times that ^[14].

Amazon's contribution here is sales. ChatGPT already has hundreds of millions of users ^[12]. Having signed the pilot, OpenAI is not building the sales operation those users would otherwise require. "They're still trying to build out even many of the basics of a functional ad sales operation," Nate Elliott, principal analyst at eMarketer, told PPC Land ^[10]. Every earlier expansion of ChatGPT advertising, including the self-serve ads manager, new country rollouts and falling minimum spend thresholds, had OpenAI selling its own inventory ^[19]. The buyer relationship, and the campaign the placement sits inside, now belongs to Amazon ^[1].

By PYMNTS's account, the arrangement extends Amazon's advertising reach onto a surface it does not own, host or fully control end to end ^[17]. The units run as text or images beneath a ChatGPT response, labelled as sponsored ^[4]. "Conversational ads represent the fastest growing engagement opportunity for brands to reach new and existing audiences," said Chris Conetta, Amazon DSP's director of omnichannel supply ^[9]. At a $1 billion annualized run rate, the inventory Amazon has agreed to sell is about 1.4% the size of its own ad segment ^[13]. Neither company disclosed the revenue split ^[18].

The plausible endings differ in who sets the price. The pilot stays small, and Amazon becomes another intermediary of the sort OpenAI was already selling through ^[8]. Or Amazon's platform becomes the main route to ChatGPT inventory, and OpenAI chases $100 billion without ever holding the advertiser contract ^[7]. Or OpenAI takes the budgets now and reprices later, because it kept the system that decides which ads appear and where, and selection sets the clearing price ^[3]. I'd expect the third, and the evidence behind that is one pilot with one named brand, limited to select U.S. advertisers ^[1][2]. If a year from now most ChatGPT ad spend arrives through Amazon DSP while OpenAI's own self-serve channel has stopped growing, the pricing power sits with whoever sells the demand ^[19].