OpenAI's Ad Problem Is a Decision Problem

Let’s be honest:

OpenAI didn’t just fumble the messaging.

They built an ad machine, slapped a cute label on it, and tested it on people who pay for the privilege—no opt-out, no warning. Oopsies.

What happened:

OpenAI tested "app suggestions" in ChatGPT that users and code analysis identified as advertisements.
If you’re paying $200 a month for ChatGPT Pro, you got ads you couldn’t turn off. Surprise! That’s not what you signed up for.
Android code (v1.2025.329) contained explicit "ads feature" and "search ad" strings.
OpenAI’s own docs? They’re betting on a cool $1 billion from squeezing free users by 2026.
OpenAI paused the program after backlash, calling it a failure in execution.

OpenAI called them "app suggestions" and acted shocked—shocked!—when users called them what they are: ads.

TL;DR:

What Did OpenAI Actually Test in ChatGPT?

OpenAI Chief Research Officer Mark Chen admitted "anything that feels like an ad needs to be handled with care, and we fell short" after paying subscribers—people shelling out $200 monthly for ChatGPT Pro—reported seeing promotional content they couldn't turn off.

OpenAI stuck to the "app suggestions" script. The Android code? It snitched.

Version v1.2025.329 didn’t even try to hide it: "ads feature," "search ad"—right there in the code. You can dress it up for PR, but code always tells the truth.

Why Is OpenAI Pursuing Advertising Revenue?

OpenAI’s betting the farm on $1 billion from free users in 2026. They’re not profitable, so every new user is a lifeline.

Financial pressure doesn’t make you smarter. It just shows where you’re winging it.

Sam Altman once called advertising a "last resort" and dismissed ads as something he "kind of hates as an aesthetic choice."

Then Instagram changed its mind. In a recent Stratechery interview, he said: "I love Instagram ads, they've added value to me, I found stuff I never would've found."

If your brand values change every time the revenue forecast does, they’re not actual values. They’re just "talking points." 😬

OpenAI’s building the money machine faster than they’re building the rules for using it.

Did Paying Subscribers React Negatively?

Subscribers expected ad-free. Instead, they got ads they couldn’t turn off. That’s how you turn trust into churn.

Take away control from people who pay you, and you’re not building trust. You’re running an experiment: How much can we annoy you before you bail? Probably not the greatest way to handle it.

The Wall Street Journal reported Altman's recent "code red" memo. The memo prioritized improving ChatGPT's quality and delayed other products, including advertising.

Strategic pivots after user backlash reveal reactive decision-making masked as strategy.

What Does This Reveal About OpenAI's Strategy?

OpenAI brought in Fidji Simo (ex-Instacart, ex-Facebook) as CEO of Applications. Translation: They didn’t need to announce ads—the org chart already did.

Saying "we’re not doing ads" while quietly building ad tech? Ummm.

I’ve seen this movie before: Move fast, chase revenue, forget to build the decision framework that keeps it from blowing up later.

The real question isn’t "should OpenAI run ads?" It’s "why did they build the ad engine before the roadmap?"

OpenAI built the ad machine, tested it on people who pay, called it something else, and only hit pause when users called their bluff.

This is the outcome when the money machine outruns the strategy—and you’re left making it up as you go.

So, here are the hot points:

Did OpenAI put ads in ChatGPT?

OpenAI tested "app suggestions" that functioned as advertisements, though the company initially avoided calling them ads. Android code explicitly referenced "ads feature" and "search ad" functionality. OpenAI paused the program after user backlash.

Were ChatGPT Pro subscribers able to stop seeing see ads?

ChatGPT Pro subscribers ($200/month) reported seeing promotional content during the test period, with no way to disable it. OpenAI has not clarified whether paid tiers will remain ad-free in future implementations.

How much revenue does OpenAI expect from advertising?

Internal documents show OpenAI projects $1 billion in new revenue from "free user monetization" in 2026.

The company is not currently profitable and relies on user growth to fund its operations.

What is Sam Altman's take on ChatGPT ads?

Sam Altman previously called advertising a "last resort" and said he "kind of hates" ads as an aesthetic choice.

But he later changed his position after claiming "positive experiences" with Instagram ads, stating they "added value" and helped him discover new products.

Who is leading OpenAI's advertising strategy?

OpenAI hired Fidji Simo—former executive at Instacart and Facebook—as CEO of Applications. Her background in advertising and monetization signaled OpenAI's intent to build ad infrastructure before the public controversy.

Why did OpenAI call ads "app suggestions"?

The terminology gap between "app suggestions" and the underlying code architecture reveals a misalignment between public messaging and operational reality. It's a language problem that signals a deeper structural issue in decision-making.

What was OpenAI's "code red" memo about?

The Wall Street Journal reported that Sam Altman issued a "code red" memo prioritizing ChatGPT quality improvements and pushing back other products, including advertising. This strategic pivot followed user backlash and represents reactive decision-making in response to public pressure.

AT THE END OF THE DAY..

Code doesn’t lie. OpenAI’s Android app had "ads feature" and "search ad" baked in before anyone admitted to testing ads. The code told the truth before the PR team could spin it.
You can call an ad an "app suggestion" all day. If users can’t turn it off, it’s still an ad—especially when people are paying for ad-free.
Financial pressure doesn’t build strategy. It just shows where you’re patching holes with duct tape and hoping nobody notices.
Removing user control erodes trust: Testing promotional content with $200/month subscribers without an opt-out option measures friction tolerance, not product-market fit.
Org charts spill secrets. Hiring Fidji Simo (ex-Facebook, ex-Instacart) as CEO of Applications told us ads were coming before anyone said a word.
Calling a last-minute pivot a strategy doesn’t make it one. The "code red" memo was just OpenAI scrambling after getting caught.