MW Why Alphabet and Meta investors shouldn't sweat ChatGPT's ad launch - for now
By Christine Ji
While ChatGPT's entry into the ad market marks a pivotal moment for the company, analysts argue Google and Meta face little immediate threat to their advertising empires
Ads could add several billion to OpenAI's revenue in 2026, analysts predict.
OpenAI is finally wading into the advertising business, and while that move could improve the company's financial fortunes, experts say it will be a while before ChatGPT threatens the dominance of Alphabet and Meta Platforms in the digital-ad market.
Last Friday, OpenAI announced that it would be testing ads in the free and new $8-a-month "Go" tiers of ChatGPT. The company plans to place contextually relevant ads at the bottom of conversations, though it emphasized that these placements will not influence AI responses or involve the sale of personal user data.
CEO Sam Altman had previously called ads a "last resort" business model in 2024. However, in the months leading up to the announcement, analysts on Wall Street had increasingly speculated about the possibility of OpenAI using ads as an avenue of monetization.
Read: As competition heats up, OpenAI changes course and introduces ads on ChatGPT
OpenAI's strategy shift brings its rivalry with Google $(GOOGL)$ $(GOOG)$ and Meta (META) into a new terrain. The companies have battled to acquire users for each of their large language models, with Gemini eroding ChatGPT's first-mover advantage. OpenAI has launched a web browser called Atlas to compete with Google in its search business. And OpenAI's Sora video-generator had Wall Street analysts wondering if Meta's social-media platforms could lose popularity.
Both Meta and Alphabet shares are off about 2% alongside broader market pressures on Tuesday.
But Evercore ISI analyst Mark Mahaney does not expect OpenAI's latest foray into ads to result in a "material market-share shift in the near-to-medium term," he wrote in a Monday note. He pointed to Google's "unrivaled distribution advantage" through its Chrome browser and Android operating system, as well as a sophisticated ad-tech stack that is preferred by advertisers.
Mizuho analyst Lloyd Walmsley echoed that sentiment, writing on Monday that OpenAI is "a long way off from a scaled ad product." The company will need to build out new technological infrastructure to measure and serve ads. Both Walmsley and Mahaney said that incumbents such as Google and Meta will continue to capture the majority of advertising budgets for now.
On Sunday, OpenAI shared that it generated an estimated $20 billion in revenue in 2025, and Mahaney estimated that advertising alone could be worth "several billion dollars" of revenue in 2026.
This level of advertising revenue won't be enough to disturb Google and Meta's businesses in 2026, Walmsley wrote, although it could be a headwind for smaller players.
Read: Is Meta's stock in trouble? OpenAI's new app has Wall Street worried.
Walmsley said that Meta is the best-positioned tech name in the online-ad industry, thanks to its ability to effectively capture ad spend through AI-driven discovery, which surfaces relevant content to users without requiring them to initiate a search. He predicted that the company will grow revenues at a 22% annual clip through 2027, thanks to improvements in engagement and ad relevance, and advancements in artificial intelligence.
While the immediate financial threat is muted, uncertainty remains over the long-term trajectory of OpenAI's ad business. Evercore estimated that if ChatGPT executes well, it could generate over $25 billion in ad revenue by 2030. The firm also believes that OpenAI could soon announce 1 billion weekly average users.
If OpenAI's ad formats prove to be more helpful than intrusive, the company could eventually "siphon off valuable commercial queries that traditionally go to Google," Mahaney warned. But competition between the two companies remains fierce, and Mahaney expects Google to aggressively utilize Gemini and AI Overviews to defend its share of the ad market.
See more: Why Alphabet's stock can further reign as 'king' of the AI trade in 2026
-Christine Ji
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(END) Dow Jones Newswires
January 20, 2026 11:01 ET (16:01 GMT)
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