Microsoft-backed (MSFT) AI firm OpenAI will begin showing interest-based display ads inside ChatGPT conversations for free-tier and low-cost Go users in Japan. The move comes as OpenAI tries to turn its AI chat into a new advertising channel. The ads will appear directly inside chats and will be based on users' past conversation topics, thereby allowing advertisers to show product and service suggestions that match a user's interests.

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In Japan, OpenAI will work with major local advertising partners Dentsu Digital, Hakuhodo DY ONE (HKUOF), and CyberAgent (CYAGF) to source and place ads on the platform, according to Nikkei Asia. However, OpenAI says it will avoid using sensitive personal data, including health-related information, when targeting ads. The company also plans to exclude political content and heavily regulated categories.

Pricing is expected to be around ¥5,000 (about $31) per 1,000 impressions, which suggests that OpenAI is positioning ChatGPT ads as a premium digital advertising product. This Japan launch follows an earlier U.S. trial that began in February. Since then, OpenAI has expanded its ad-supported service internationally into markets such as the U.K., Australia, New Zealand, Canada, Japan, and South Korea.

What Is the Price Target for Microsoft?

Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 35 Buys and two Holds assigned in the past three months, as indicated by the graphic below. Furthermore, the average MSFT price target of $557.64 per share implies 47.6% upside potential.