ChatGPT-maker OpenAI has quietly backed away from its plan to handle bookings and purchases directly inside ChatGOT, opting instead to push transitions into third party apps. The move of the company first reported by The Information, marks a significant strategic retreat for the AI company, which had been testing integrated checkout features. This announcement made by OpenAI sent shares of Expedia and Booking.com soaring on March 5, with Expedia up by nearly 13% and Booking.com witnessed a rise of about 8%. As reported by Business Insider, the analysts at TD Cowen called the decision a “stunning admission,” noting that the vision of AI platforms replacing apps as the “new OS” has been delayed, if not derailed.

What OpenAI pulled back

As per analysts, OpenAI appears not willing to take the operational headache of commerce such as payments, cancellations, refunds and customer service complaints and that to in the complex travel sector. Online travel agencies (OTAs) carry legal obligations and liabilities that chatbots and search engines do not, making them better suited to handle the intricacies of bookings.In short, OpenAI may have concluded that it does not want to handle the cumbersome part of commerce as those tasks are operationally complex and less profitable for the company. There’s precedent for this retreat. Google’s “Book on Google” service, launched in 2015, was shut down in 2022 after failing to gain traction. Consumers often prefer established OTAs, which offer broader inventory and higher conversion rates.Also, the online travel portals have some legal obligations and responsibilities which are not there for chatbots and search engines.

OpenAI starts testing ads in ChatGPT

Last month, OpenAI started testing ads in ChatGPT. Sharing a blog post, the company said it has started testing ads in the AI tool in the United States and will apply only to logged-in adult users on the Free and Go plans. “We’re starting to roll out a test for ads in ChatGPT today to a subset of free and Go users in the U.S,” OpenAI said in an X post adding “Ads do not influence ChatGPT’s answers. Ads are labeled as sponsored and visually separate from the response. Our goal is to give everyone access to ChatGPT for free with fewer limits, while protecting the trust they place in it for important and personal tasks.”OpenAI said ads are meant to help fund the infrastructure needed to keep the Free and Go tiers running and to support broader access to AI tools. The company said it will study feedback closely before expanding the program.“Keeping the Free and Go tiers fast and reliable requires significant infrastructure and ongoing investment. Ads help fund that work, supporting broader access to AI through higher quality free and low cost options, and enabling us to keep improving the intelligence and capabilities we offer over time,” the company stated in the blog post.