Inside OpenAI’s Ads Push & Potential $100B in Funding, Preview for SpaceX IPO | Dec 24, 2025

0:13Welcome, everyone, to the Informations TI TV. My name is Akash Pasricha. It is Christmas Eve, December 24th. We have got one more show before the holiday. We are kicking off with a story about how OpenAI is looking to kickstart an ads business on ChatGPT. Then it is time for this week's Editor's Cut. The information recently scooped that OpenAI is seeking new funding, potentially as much as$100 billion. With With Amazon already in talks to invest$10 billion, we will dig into how OpenAI might reach that$100 billion target. And we will end the show with an interesting Christmas story. Our Elon Musk reporter, Theo Waite, joins us for a story about his hometown.

0:57And the title says it all, what XAI's Christmas lights say about the SpaceX IPO. It's going to be a fun show. So let's get right on into things. OpenAI is laying the groundwork for ad integrations into ChatGPT. And today, the information has some exclusive reporting out on what that could actually look like and what features could actually become a reality. I want to bring on Shree Mupiti, who co-authored that piece to tell us more about what she is hearing. Shree, welcome back to the show. It's great to have you here. Great to be here. So what are you hearing about OpenAI's ad strategy on the ground?

1:34Totally. So CEO Sam Altman, as well as other execs, have hinted at an affiliate revenue model in which OpenAI takes a cut of revenue for any product recommendations that a user purchases. But more lately, especially through our reporting, we've been hearing that OpenAI employees have been actually working through ideas of what ads could actually look like within ChatGPT. For instance, employees have discussed tweaking the AI models to be able to show sponsored information as a priority within the results. For example, if you're searching for mascara recommendations, a Sephora ad might pop up, as well as actually making mock-ups for what ads would look like within ChatGPT.

2:16I have to say, it's so funny to me that when people think about people advertising on these platforms, Sephora seems to be the example that everyone uses. I was just watching a TV show last night, and Sephora is like the advertiser in chief for these types of stories. So, look, there were a lot of interesting details. One of the things that I found interesting in your story is you talked about how the ads could potentially actually pull not from the acute search result that you've put in or the inquiry, I guess. It could actually pull from, you know, other inquiries that you've made, you know, two, three days ago and really your chat history in some cases.

2:54It's more that the chat history and the preferences that you indicate through your chats will be a way to be able to personalize, for example, a specific ad to you. So I believe that the ad effort is still super early. So it's not clear in terms of whether or not, for example, if you search something a few days ago, it will pop up again. But more that the chatbot knows the different types of information about you. And so if, for example, you're searching for a trip to go to Spain and it recommends you to go to Sagrada Familia and a user is interested, then perhaps, for example, ChatGPT might present a sponsored information link to Sagrada Familia as that secondary step.

3:33A few other ideas that OpenAI employees have been discussing is a disclosure note to actually indicate that some of the results that you're searching has sponsored information, as well as, for example, a sidebar where instead of cluttering, for example, the main chatbot interface may pop up to the side so you can sort of look at it on the side. And then this is primarily on sort of what the user interface would look like for users. But then on the model side, you need to make sure that the model can actually capture that sponsored information. so it will basically prioritize sponsored information for it for example in that spain example and then be able to pop up for example anything that is sponsored to show that within the results themselves it is kind of interesting to me again thinking about the the way they're doing ads they're short of in some ways it's the google ad model where like we said it's depending on what you search like you said in other cases it's a little bit more like social media like Instagram, it's like it's an amalgamation of all the things that you've been searching for and them being able to target ads.

4:40So it is kind of interesting to see how they're thinking about things. Do we have any estimates from either the company or maybe analysts or people in the company's orbit about how much revenue these ads could actually generate for the company at all? Totally. So according to revenue projections from over the summer, the company had actually shared that they expect to make about$110 billion through 2030 from free user monetization. So free user monetization basically hints at ads. This is revenue from any non-paying users. And for this free user monetization bucket of revenue, the average revenue per user starting next year would roughly be$2, but then goes up to$15 by the end of the decade.

5:23And the gross margins of these types of products similarly match Facebook's margins as well in terms of roughly 80 % to 85%. And so our understanding is that ads, for example, would fall within this for-user monetization bucket. What about shopping? How's that going over at OpenAI? Shopping is an area that OpenAI has been pretty forward with in terms of sharing with merchants and sharing externally with folks versus they've been more quiet about, for example, ads. So some of the shopping efforts that OpenAI has launched so far are, for example, apps partnerships with companies like Zillow and DoorDash, where as a user, you can actually chat to be able to have home delivery directly to you or look for a house in San Francisco, for example.

6:07And then they also work with Shopify and Stripe to process in-chat shopping. So again, back to the Sephora example, if I'm looking for Mascara and I'm really in a need for the Christmas holidays, I'll recommend something and then be able to purchase it quickly and deliver it to my in-laws house. And so those are some of the shopping efforts that OpenAI has been really public with. And also just in terms of merchants preparing for this e-commerce push. when OpenAI had launched, for example, a specification to be able to have merchants send their product catalogs to OpenAI. The OpenAI had thousands of merchants actually on the wait list.

6:45And so that really indicates sort of their push in e-commerce and how merchants too are really excited to participate. Right. And speaking of that wait list, again, you know, the detail that was really interesting to me was it's not just the merchants, it's also going back to the advertisers. Advertisers, you reported, have tried to at least start to build some kind of a relationship with OpenAI. And it feels like they kind of have the world waiting on how this thing is going to play out. And they're still like, just give us a second to figure out how it's all going to work. Meanwhile, all these merchants, they're trying to get their relationship points and where they can, I guess, because it's certainly going to matter.

7:29Let me ask you a quick question before we go. How much risk do you think ads might have to the ChatGPT user experience? You use a platform. I use it. I've tried to do the exercise of if I were to see the ads, would it make me question the result at all? I mean, how do you think customers think about that? Totally. I think this is the real big question about how do we not lose users' trust And I think that's why OpenAI has been so slow and early and experimented with their approach, because our reporting essentially shows that the format that these ads could show up in in ChatGPT would have to be totally different from, for example, how it shows up in Facebook or Instagram.

8:11And so this type of new experience would require a lot of effort and experimentation. But I think it is a huge risk. It's a big bet. If they can get it right, that means$110 billion through 2030. If they don't, I think that - A little less, a little less. Great. Okay, well, Sri, I want to thank you for coming on. Have a great holiday and we will talk to you when you get back. That is Sri Mupiti, our OpenAI and Anthropic reporter here at The Information. Okay, for this week's Editor's Cut, we are unpacking OpenAI's fundraising ambitions, which in a new round could total up to an additional$100 billion at a$750 billion pre-money valuation.

8:54It is a big feat even for Sam Altman and the OpenAI fundraising machine. But to break down where this money could come from, I want to bring on our co-executive editor, Amir Afradi, and our managing editor, Laura Mandaro. Welcome to you both. It's great to see you. Hey, guys. Yes. Okay. So, Laura, I want to start with you because you are wearing Christmas colors. So, I want to understand where you think the$100 billion could conceivably come from of all the options that Sam Altman has open to them. Well, as Katie and Miles, two of our finance reporters, wrote yesterday in Dealmaker, it could be sort of a smorgasbord.

9:36Obviously, I think financial investors will want to get in. and these could range from venture capital firms that have already invested. Sequoia is a, and we don't know these names, but these are some of their past investors, the crossover funds like Dragoneer, as well as the big mutual funds that tend to invest in late-stage companies. However, that's, you know, maybe that's 10 billion. So how do you get to 100 billion. There have already been big strategic investments in open AI, such as Amazon, or it's expected. And so we could see some of these cloud providers also putting in equity as they have for some of the other model makers.

10:26And then there's a third bucket, which are these very big sovereign wealth funds um you know is it uh mgx um which is um a uh uae fund um we've reported that they've talked to uh saudi arabia's piff public investment fund which is a huge fund we don't know we don't think that they've invested so um you know there there are options um but it's still a colossal number. Okay. So Amir, like Laura said, there are a lot of options. I'm curious what you're hearing in terms of which of these options is actually the most likely to maybe start the round. We saw the news with Amazon. Gosh, hyperscalers, what do you think?

11:15Yeah, I mean, you do have situations in Silicon Valley where late stage private firms start to tap public market investors, right? The fidelities of the world, the kind of funds that manage largely public stocks, but they do get in earlier sometimes. Sometimes it's great, sometimes it's not, and they come in at a crazy high valuation. I think a bunch of those kind of folks piled into like Instacart, you know, when it was overvalued before it went public. So there are pluses and minuses to that, but there is that kind of capital around. It's essentially like, almost like going public without going public, you know, raising that amount of money.

11:59I think it's interesting that in 2023, when this kind of train really got rolling, Sam Allman told his staff, you know, this is going to be the most capital intensive business of all time. And we may even raise$100 billion in this process from outside investors. And at the time, I remember writing that down. I was like, okay, wow, I don't know what to say about that. They're already 60 % of the way there, assuming this$22.5 million from SoftBank gets in before the end of this year as part of an older round. So they're already more than halfway there to 100 billion before talking about this next 100 billion.

12:43But I would say that the reaction we've gotten is one of a lot of confusion. People are basically asking, okay, they had a year in which they raised$40 billion. Why do they need to raise 100 billion right now or the next few months? What's the rush? Why can't they do this in increments? So this is almost a bit of a trial balloon, if you will. know these kind of rounds um there's a lot of like emotion and momentum and all these really interesting factors um but on the fundamentals it's it's not as if this company is crazily valued i mean they they have plenty of revenue they're growing extremely quickly the the multiple um on revenue that they would be getting in this round is not insane if you look at the revenue that they currently have in their growth rate um and the fact that you know if they stopped all research spending, they could actually turn a profit somehow.

13:41It would be tough, but they could do it. So yeah, it's not insane. So let me ask you this, Laura, in terms of what this money is going to, there's obviously the research spending. And I mean, part of that is the people hiring the people. But look, it's building the data centers. It's getting your hands on the chips. I mean, look, the age old adage, debt is cheaper than equity. Maybe it's a silly question, but is debt not an option here? Why do they have to go equity here? That's a good question. I mean, they do have some debt. And I mean, they are far from profitable. So they have revenue. They don't have cash flow.

14:22They're burning cash. So that's not exactly the best means of borrowing or the best conditions for borrowing. I mean, do they borrow against something? They don't own these chips or maybe they own some, but that's not, you know, they're, they're renting the chips. So I, I mean, I think it's a, it's a very good question for any, um, private startup that's burning a tons of cash. Can, can you get debt? And I think there's some, some problems there, right. That I've just listed. Um, uh, you know, and, and equity has been very forthcoming. I mean, we've seen a lot of, uh, clearly very huge funding rounds, but I, I think, um, you know, One constant has been that all of these companies have seemingly been able to raise.

15:13And just a year ago, the valuation was at$160 billion. And we were writing, wow, this is crazy, right? And now we're talking about$750 or over$800 if you include the money. So if there's a sign of pullback, it's not very apparent for the largest companies. And their growth is rising very quickly. We had a good chart in a story on Sunday about how fast Anthropic and opening eyes revenue has grown. I mean, you know, is it tripling in a year, up eight times? I mean, this is what you'd want to see, I think, as an investor. And I think, you know, like Amir said, there are very big pools of capital out there.

16:04They have already raised money from mutual funds, the T-Rose and Fidelity. But there are many more out there. And I don't know. I mean, in your answer to your question about what they need the money for, I think that is the most interesting part of this conversation because there's really been no upper limit to how Sam Altman has envisioned this company and what it gets into and the partnerships it makes. So does it go beyond? I mean, they're already kind of working with SoftBank about setting up their own data centers that are not going through the cloud companies but are going to be accessing chips.

16:45Do they, you know, push that verticalization even further? We've reported that they're, you know, working on maybe designing their chips, or do they tap some energy source? I think that's what's going to be fun for our team to report on in the new year. Amir, let me ask you this. Is there any historical parallel here for a single company raising this much money? And are there any broader systemic risks to the venture capital ecosystem to so many people pouring into one company other than the obvious risk, which is that you're not exactly diversified? But can you think of there being any parallel here?

17:29Nope. We're in uncharted territory for sure. The thing I would say, though, is that - Well, that's a good segment. Maybe we'll just call it there. Well, a lot of firms have already made plenty of paper gains on this entity. And it has done a good job of, depending on which side of it you're on, of allowing shareholders to sell shares. So there has been quite a lot of liquidity. I can't remember if they're like at 11 billion or 12 billion of money that has gone out or sold shares that have been sold in the last few years alone, which is pretty incredible. So yeah, there have been enormous gains already.

18:16I think the only risk is for the firms that come in at this kind of evaluation and how much more can this thing go. I think clearly ChatGPT is under monetized. And so one of the stories we haven't talked about is one that ran this morning on the ads push. Maybe you may be interviewing other colleagues about that soon. That's a massive push. And it's going to be monetized, monetized, monetized. And there's plenty of runway for that, even if the subscription business kind of slows down in the next year. So I don't know. Just from a purely fundamentals perspective, it's not crazy. They obviously have the most unprecedented amount of spending plans that we've ever seen in history.

19:01I think the public equities don't believe that that is real. They don't believe that OpenAI can actually fulfill its obligations. Raising a tremendous amount of additional capital, I think, will help in that regard. So, yeah, I can't remember what the original question was. Well, the original question was just, is there any parallel? And the answer was no. And so, yeah, Uber is the only one that I can remember where, you know, they were raising at the time unprecedented amounts of venture capital and they were burning a lot of money. And there was a ton of skepticism about whether they could ever make money.

19:43And if you did squint and look at the financials, you could say something similar, which is that if they stopped throwing cash around to create marketplaces and to pay drivers the amounts they were paying to subsidize rides the way they were, then they could actually make a profit. A lot of people actually doubted that, but it was true. And so that's the only kind of historical example that I think about in this moment. And it did happen. And it just took a while. I mean, that's - Well, certainly, I know. I mean, they went public, and now we're at a point. I remember Uber turned a profit. The whole stock market went, look, look what happened.

20:24I mean, with OpenAI, it's not, you know, the projections we've reported on are, you know, you can see the path to cash flow in a couple years. I think the question is, do they test the public markets before that's actually really happened? And it could. I mean, we've seen big tech companies go public before they're profitable. Everybody points to Amazon, and certainly some are still not profitable in public. So it just doesn't seem that crazy to think of it. It's just that the scale of these, the spending and the cash burn is quite high. Right. Well, it is certainly an interesting story to see how it plays out.

21:02I'm looking forward to more reporting from both of your teams on the topic. I want to thank you for coming on. That is Laura Mandara, our managing editor, and Amir Afradi, our co-executive editor here at The Information. Okay, we have one more story for you before we go, and it is a Christmas story. Our Elon Musk reporter, Theo Waite, has a piece out today about his hometown, Memphis, Tennessee. It is a great headline, What XAI's Christmas Lights Say About the SpaceX IPO. I want to bring on Theo to talk all about it. Hey, Theo, how you doing? Hey, Akash. Merry Christmas. Thank you for bringing some of the Christmas spirit with your story.

21:47It's a good piece, and we're looking forward to reading it in the briefing. But I thought we'd get in the spirit here, and so I've got a little bit of a trick I want to show you at the snap of a fingers. How's that? Wow. Pretty cool, right? That's amazing. Yeah, well, thank you to our production team for making that happen. It wasn't my idea, actually. It was theirs. Okay, let's talk about Memphis and the Memphians, which I did not know is what they called them in Memphis. You had a story about Christmas lights and how that relates to data centers. So I'm going to give the floor to you. It's true.

22:23Yeah, XAI kind of handed me the perfect metaphor to talk about on Christmas for the kind of general backlash against data centers and companies, you know, efforts to win over their neighbors. So there's this long running Christmas light show in Memphis called Starry Nights, and it's in this huge park, kind of on the outskirts of the city, and people go and drive their cars around and look at these expensive, large light shows. And this year, it's called Starry Lights presented by XAI. And if you go and look at the Starry Lights Instagram accounts and Reddit threads and things, there are lots of people in the comments that are, you know, pretty upset about this.

23:12And, you know, calling for boycotts or saying, you know, I can't believe this local park that I love would take money from Elon Musk. And it's just kind of the latest example of XAI's presence in memphis where it has two very large data centers uh kind of being a flashpoint for for people and okay so so the people are upset about the christmas lights are the politicians upset uh generally the politicians in memphis that are in power currently are are pretty uh lightly to extremely pro xai um because they're the same ones that kind of brought xai to Memphis in the first place. Like this has only been happening for 18 months.

23:56So, you know, there haven't really been elections yet. That being said, though, there are a number of, you know, primary challengers and, you know, other things coming up for the midterms next year that, you know, where people are being a lot more skeptical. Okay. Now, talk to me a little bit about what you think this has to do with Elon's data center ambitions in outer space okay so you know at the same time this has been happening with xai um elon has been you know hyping up spacex ahead of a possible ipo next year and kind of the latest uh you know flavor of futuristic uh technology that he's talking about is is putting data centers in space and he's saying the only way to scale ai uh to you know the degree that we need to fulfill his dreams for humanity is to put data centers in space because there's so much power up there and it's easier to cool um to cool data centers and you know it basically like all the resource constraints that exist on earth don't exist in space in the same way and a lot of skeptics you know rightfully say it's very very expensive to put data centers in space what if the chips fail like there are all these kind of engineering hurdles and financial hurdles that are totally real.

25:18But, you know, in my opinion, I think the only way that data centers really make sense in space is if you think of them as a hedge for opposition on Earth. Like, I think, you know, a lot of people in tech are probably coming to realize that there's maybe a, you know, a small percentage chance, you know, maybe 5 % or whatever, that in the next few years, the backlash to data centers on Earth will be so big that you won't really be able to build them. and in that scenario, all of a sudden, it doesn't really matter if building data centers in space is expensive because it'll be the only way you can build them.

25:51Okay, so I'm just trying to track the argument here. So you're saying that if there is so much backlash on Earth to these data centers, starting with the people reacting to the Christmas lights in Memphis, if there's so much backlash, then maybe the data centers in outer space actually make sense. That's what you're saying. Yeah. I mean, you know, I'm being a bit silly by connecting it to the Christmas lights, of course. No, I'm with you. I'm with you. But yes, but yes, I think the Christmas lights are a small example of how people in general, you know, have this feeling. Right. The backlash, the backlash at large.

26:28Yeah. Right. Right. Can I ask you, you know, you have covered the backlash to these data centers broadly around the U.S. You know, where do you see this going? I mean, you know, is this something where are there likely to actually be data centers you think that may have to shut down, may have to move? I mean, like how strong are these efforts in these local towns to, you know, at least make things better for them? So in Memphis specifically, it's a pretty particular local issue where there's election for county mayor next year. And theoretically, the county mayor could control the health department, which could then make it so XAI couldn't use generators to power its data center.

27:15And it's like kind of a convoluted local politics thing there. But, you know, it is kind of an extreme example of what's going on around the country. Like, earlier this month, Senator Bernie Sanders was, you know, calling for a nationwide moratorium on new data centers. And like, the Senate's not going to go and, you know, pass that or, you know, have Trump sign it anytime soon. But, you know, in general, the tides do seem to be possibly shifting some like, you know, Ron DeSantis, who, you know, a couple of years ago was, you know, getting endorsed by Elon Musk in the in the primary for the presidency, you know, now is going out and making pretty anti data center, anti AI statements like there are, you know, some politicians in both parties that are being pretty loud about this and, you know, see it as a potentially winning issue.

28:05But it is, you know, almost certainly years away from, you know, coming in. Right. And I mean, the thing about these data centers, obviously, is the biggest ones are still in the planning stages. And so I anticipate we will see more of these discussions popping up once these data centers actually start operating and, you know, using a lot more of the power. So it's certainly an interesting story to keep track of heading into the new year. Theo, I want to thank you very much for coming on. That is Theo Waite, our Elon Musk reporter, bringing all the Christmas spirit here on TITV. Thanks, Akash.

28:45Okay. Well, that does it for today's show. We are off tomorrow and Friday for the holidays. We will be back on Monday at 10 a.m. Pacific, 1 p.m. Eastern. I want to thank Amazon Web Services, who is our presenting sponsor for this production. And I want to thank you for tuning in. We really do appreciate your viewership. Merry Christmas to you all. Have a great holiday, and to all, a good night.