In a striking reversal, AI startup Perplexity has decided to ditch plans for advertisements in its chatbot, saying that introducing ads could undermine user confidence.
The company, which once led the way in testing sponsored responses, now insists that maintaining credibility outweighs short-term revenue gains.
The move sets Perplexity apart in an industry increasingly turning to ad-driven monetisation to offset soaring AI infrastructure costs. According to The Financial Times, the firm quietly began phasing out ads late last year and has now confirmed there are no immediate plans to bring them back.
Trust over monetisation
Perplexity was among the first AI companies to explore advertising, introducing sponsored placements below chatbot responses in 2024. But executives now say that even clearly labelled promotions risk corroding the perception of objectivity that underpins user trust.
“A user needs to believe this is the best possible answer to keep using the product and be willing to pay for it,” a company executive told the FT. Another added that “the challenge with ads is that a user would just start doubting everything… which is why we don’t see it as a fruitful thing to focus on right now.”
The firm’s leaders emphasised that Perplexity’s business revolves around accuracy and truthfulness, principles they fear could be compromised by the presence of paid messages. The startup, valued at around $18 billion, has reported roughly $200 million in revenue, the majority of which comes from paid subscriptions rather than advertising.
OpenAI’s ad gamble raises questions.
While Perplexity retreats from advertising, OpenAI is leaning into it. The company recently began testing ads within ChatGPT for users on its Free and Go plans, the latter a low-cost $8-per-month tier launched globally in early 2026. Higher-tier subscribers, including those on Plus, Pro, and Enterprise plans, remain ad-free.
OpenAI says the ads are “clearly labelled” and kept separate from chatbot content. It also claims they won’t influence responses or give advertisers access to user data beyond basic metrics such as clicks and impressions.
Ads, the company adds, won’t appear near sensitive topics like politics or mental health, and users under 18 won’t see them at all.
Still, the rollout has triggered unease among users and critics alike. Concerns over privacy, algorithmic bias, and the blurring of commercial and conversational spaces have dominated online discussions. The backlash intensified after rival firm Anthropic aired tongue-in-cheek Super Bowl ads mocking the idea of chatbots peppered with product plugs.
While ads may help fund the costly infrastructure that powers large AI models, Perplexity’s decision shows another path, one that prioritises trust and accuracy over short-term monetisation. As the AI industry experiments with business models, the divide between ad-funded and ad-free AI may end up defining who users trust most.
