Amazon Is Becoming a Gateway to ChatGPT Ads

Amazon has entered into an agreement with OpenAI, enabling certain U.S. advertisers to extend their existing Amazon campaigns to ChatGPT, according to a recent announcement from Amazon Ads. The process involves purchasing ad placements through Amazon's programmatic ad platform, the DSP, without the need for direct negotiations with OpenAI. Delta Vacations is among the first brands to test the pilot program.

Chris Conetta, the director of omnichannel supply at Amazon DSP, stated that conversational ads represent a rapidly growing engagement opportunity for brands to reach new and existing audiences. The partnership splits responsibilities between Amazon and OpenAI. Amazon manages and sets up the campaigns while OpenAI's ad system determines which ads appear and where they appear. The ads are displayed as text or images beneath ChatGPT responses and are labeled as sponsored.

This deal marks a shift for Amazon, as it previously barred ChatGPT, Claude, and Gemini from accessing its retail ecosystem despite developing competing AI shopping tools. OpenAI, on the other hand, has leveraged Amazon's sales machinery and robust advertiser relationships, which OpenAI has yet to construct independently. OpenAI's ad business reached $1 billion in annualized revenue in early September, but the company aims to achieve $100 billion in advertising revenue by 2030, requiring annual growth rates of more than 200%.

Nate Elliott, a principal analyst at eMarketer, noted that OpenAI is still in the process of building a functional ad sales operation, highlighting the significant gap that the Amazon deal helps to bridge. Prior to this partnership, advertisers could only purchase ChatGPT ads through direct negotiations with OpenAI or by partnering with smaller ad-tech intermediaries like Criteo and Kargo.

With a trailing 12-month advertising revenue of over $70 billion, Amazon's advertising segment far surpasses the scale of these existing partners, providing OpenAI with access to advertiser relationships, budgets, and campaign infrastructure that Amazon has built over two decades.

The key change in this arrangement is that advertisers can now purchase ChatGPT ad space without establishing a direct relationship with OpenAI, routing the entire transaction through Amazon's infrastructure. This move extends Amazon's advertising reach onto a surface it does not own or fully control, signaling a notable concession from the company that has been protective of its retail data.

From Amazon's perspective, the arrangement allows the company to expand its advertising reach onto a platform it does not fully own or control, which is a significant concession. For OpenAI, the deal represents a strategic bet: rather than spending resources and time building a sales operation from scratch, the company is leveraging Amazon's massive, pre-existing infrastructure to scale its $1 billion ad business into a $100 billion enterprise.