OpenAI Debuts at Cannes to Court Advertisers Ahead of Planned IPO

OpenAI is attending the Cannes advertising festival for the first time, using the event to recruit advertisers for its ChatGPT ad platform. The company is also pressing ahead with preparations for an initial public offering, after filing a confidential prospectus earlier this month for a flotation expected this fall.

The move comes as OpenAI is positioned alongside Elon Musk’s recently completed SpaceX offering and Anthropic’s expected fall IPO as one of the year’s most talked-about, and potentially one of the largest, listings. But the company’s ambitions are clouded by deep losses, slowing revenue growth, the absence of a fully developed business model, and a sharp strategic shift made a few weeks ago to refocus on enterprise customers.

Dave Dugan, head of OpenAI’s global advertising team, told the Financial Times that the company is committed to ads despite the broader pivot. “We are very clear that we are in this for the long term,” he said, adding that ad revenue would “subsidize and expand access to information.” He also said OpenAI is trying to build ways to monetize the hundreds of millions of free ChatGPT users.

OpenAI launched its ad platform in February and has since expanded it to seven markets. Dugan said the rollout is being kept deliberately limited, with markets chosen according to specific criteria. The company is telling advertisers that ChatGPT can surface products when users are already close to making a purchase, and says about one-fifth of users have “direct commercial intent.” Travel, retail, health and beauty, and financial services ads are reportedly performing best. Advertising executives say OpenAI has set a goal of $100 billion in annual ad revenue by 2030, though some doubt it can get there and believe it will need more sophisticated ways to attract brands.