OpenAI has launched advertisements on its rapidly growing ChatGPT platform, creating a new challenge for Alphabet's primary revenue stream. ChatGPT boasts a user base exceeding 800 million monthly active users. This scale, generating billions of queries, positions the platform to potentially divert significant advertising revenue from Google's search business.
This development introduces a new dynamic to the advertising market. Analysts suggest the increased ad inventory from a major new player could pressure Google’s growth rate. Furthermore, this inventory may also impact Google’s ad pricing structure.
Google maintains strong defensive advantages through its established ecosystem and its proprietary AI, Gemini. However, the emergence of a direct competitor in the AI-driven ad space is seen as a material risk. This risk specifically targets Alphabet's future profitability and market valuation.