OpenAI has paused all advertising initiatives and placed multiple product plans on hold as CEO Sam Altman orders what he described internally as a "code red" to rapidly improve ChatGPT's performance. The shift reflects a deeper strategic reorientation at the San Francisco-based company, which is diverting resources away from commercial expansion to concentrate on the core AI systems that underpin its flagship chatbot. The Information first reported the change, citing an internal paper, as user expectations and competitive pressure mount in the generative-AI market.
According to that document, OpenAI will temporarily halt the advertising campaign it had been preparing and suspend work on several planned features, including an AI agent designed to automate personal tasks and Pulse, a system meant to generate individualized reports. The same memo referenced internal testing of commercial features involving online retail and product promotions, suggesting the company had been quietly exploring an ad-supported model before the freeze.
The decision has direct implications for ChatGPT's user experience. Under one proposal described in the internal review, users may eventually have to choose between continuing to use the platform's memory function-which powers more personalized interactions-or disabling that feature to avoid receiving targeted advertising. The shift would mark OpenAI's first significant step toward monetizing ChatGPT through paid promotions rather than relying solely on subscriptions like ChatGPT Plus or enterprise licensing agreements.
Internal focus-group research revealed a curious trend: some users already believe ChatGPT displays advertisements. That perception has strengthened the case made internally by staff with prior experience at Meta, the parent company of Facebook and Instagram. Approximately 630 of OpenAI's 3,000 employees previously worked at Meta, according to the report, and they maintain a dedicated internal Slack channel. Among the most influential is Fidji Simo, OpenAI's CEO of Applications, who spent a decade at Meta helping to scale its advertising products. She is now reportedly leading a team exploring how commercial promotions could be integrated into ChatGPT.
OpenAI's leadership has historically expressed skepticism toward advertising. Chief Financial Officer Sarah Friar told the Financial Times last December that advertising was not an active initiative, even as the company evaluated new revenue streams. Altman himself has voiced ambivalence, telling the Lex Fridman Podcast that he "kind of hates ads just as an aesthetic choice," while acknowledging that advertising "was vital to the development of the internet." He said he preferred a subscription-based model because "users know that the answers they're getting are not influenced by advertisers."
Still, Altman has left the door open to a carefully designed ad experience. In an earlier interview, he praised Instagram's approach: "I'm not totally against it," he said. "I think ads on Instagram are kind of cool-I've bought a bunch of stuff from them. But it would take a lot of care to get right."
