Gravity secured $30.5 million to implement advertisements within AI chatbots. Its upcoming product aims to target the bots directly.

      Gravity, an adtech startup that integrates advertisements into AI chatbots, has secured $30.5 million in a Series A funding round co-led by Lightspeed Venture Partners and Committed Capital. This financing increases the company's total funding to $38.5 million. Gravity operates a comprehensive ad platform that includes a demand-side platform for purchasing ads within AI chatbots and agents, a supply-side platform enabling developers to monetize their AI applications via advertisements, and an exchange that connects both sides. Among its advertising clients are Best Buy, Target, Vercel, and MongoDB.

      The company places text-based ads in ChatGPT and various other AI assistants such as Codebuff, EcoGPT, Daimon, Magneta, Runable, and CTO.new. In April, OpenAI transitioned ChatGPT’s ad model to a cost-per-click system and is developing its own ad platform in collaboration with partners like Adobe, StackAdapt, and Criteo. Gravity aims to establish a competitive edge by controlling the entire stack and collaborating across multiple AI platforms instead of being confined to just one.

      A particularly innovative aspect of Gravity's strategy is agent-to-agent advertising, which remains unseen by human users. Advertisers provide Gravity with their product catalogs, including features and ongoing promotions. When an AI shopping agent searches within a category, it receives a compilation of relevant advertisers along with detailed descriptions. "It enhances the purchasing decision," cofounder Zach Oldham stated in an interview with Business Insider. Gravity intends to implement direct payment capabilities, allowing agents to finalize a purchase once a user provides approval.

      The market potential is substantial, with WPP Media projecting that marketers will invest $100 billion in ads through generative AI searches worldwide by 2030. OpenAI anticipates that its ad revenue will also reach $100 billion by the same year, though Oldham considers this estimate conservative. ChatGPT began incorporating ads in February and generated over $100 million in annualized ad revenue within just two months. The challenge for Gravity lies in determining whether a smaller independent platform can generate significant network effects in a landscape where Google dominates as the largest ad business and OpenAI is building its own platform. Oldham believes that by owning both sides of the transaction—buyer and seller—the network becomes more intelligent with each ad placement.