OpenAI, the creator of the popular AI chatbot ChatGPT, found itself in a controversy after users reported seeing unsolicited suggestions for apps and websites within the platform. While the company initially denied running any advertisements, a senior executive later admitted the model had indeed shown such prompts, stating the company "fell short" of its standards.
Confusion and Clarification Over ChatGPT Prompts
Earlier in the day, OpenAI had firmly stated that it was not showing ads on ChatGPT and had no active tests related to such an experience. This statement came in response to numerous social media complaints where users shared screenshots of the chatbot suggesting they "Shop at Target" or visit other commercial services during unrelated conversations.
However, the confusion persisted until OpenAI Chief Research Officer Mark Chen directly addressed a user's post. Replying to a user who saw a Target suggestion while asking about Windows BitLocker, Chen acknowledged the issue. "I agree that anything that feels like an ad needs to be handled with care, and we fell short," he wrote on X.
Chen further explained that the company had turned off this kind of suggestion to improve the model's precision and was working on better user controls. "We're also looking at better controls so you can dial this down or off if you don't find it helpful," he added.
Official Denial of Live Ad Tests Amid Internal 'Code Red'
Simultaneously, Nick Turley, Vice President at OpenAI and head of ChatGPT, took to X to quell rumours of active advertising tests. He asserted that there were no 'live tests for ads' on the platform and labelled any circulating screenshots as either fake or not advertisements. "If we do pursue ads, we'll take a thoughtful approach. People trust ChatGPT and anything we do will be designed to respect that," Turley stated.
This incident occurs against the backdrop of an internal 'Code Red' declared by OpenAI CEO Sam Altman, as reported by the Wall Street Journal. According to the report, Altman's memo instructed the company to focus intensely on improving ChatGPT's core quality and user experience. This 'Code Red' directive has reportedly led to the postponement of several initiatives, including:
- Plans for ads on the chatbot.
- Development of AI agents for health and shopping.
- The personal assistant feature called 'Pulse'.
The company uses a colour-coded system to mark problem severity, with red being the highest priority, followed by orange and yellow. OpenAI had previously declared a 'Code Orange' to enhance ChatGPT's performance.
Competitive Pressure and the Road Ahead
This focus on core product improvement comes at a critical time for OpenAI. The San Francisco-based AI startup faces mounting competition from rivals like Google's Gemini and Anthropic. The new Gemini 3 model has topped several industry benchmarks, increasing pressure on OpenAI to innovate.
In response, OpenAI is reportedly preparing to launch its next major model. According to a report by The Verge, the company is working to release the new GPT-5.2 model as soon as next week to rival Google's advancements. This move underscores the intense pace of development in the generative AI sector, where maintaining user trust while exploring monetisation remains a delicate balancing act.
