Advertisers have spent $1.3 billion on digital ads touting AI: report

As enterprises and consumers alike further adopt AI, and ahead of two highly anticipated IPOs of major AI companies, brands have invested $1.3 billion into digital ads touting their products’AI-related offerings through May of this year, up 48% compared to the same time period last year, according to Sensor Tower.

The report, published this week, details not just how AI is reshaping the digital advertising landscape, but also how the AI assistant landscape is changing, whether that’s ChatGPT losing market share or how agentic shopping is transforming consumer behavior. To reach its conclusions, it used data including mobile app download and in-app purchase revenue data, web visit and unique visitor data, and data on ad investments.

“Consumers are actively seeking these tools out,” the report read. “Advertisers have taken note.”

Hop on the bandwagon: Advertising referencing AI is on the upswing in several categories, Sensor Tower found. Health and wellness ad creative containing AI-related terms, for example, recorded a 165% YoY increase in ad investment through May of this year, according to the report. AI-related terms mentioned in ads in the financial services, business and industrials, and media and entertainment verticals all grew more than 60% YoY.

AI brands are also pouring significant dollars into their own brand advertising. In the US alone, AI brands increased ad spend by more than 3x YoY in Q1 2026, reaching $424 million, per the report. Anthropic, which is chasing an IPO, increased ad spend by 1,184% YoY in Q1, spending more meaningfully on OTT and linear TV; OpenAI was close behind at 800% YoY, with more focus on YouTube and LinkedIn, Sensor Tower found.

Brands are also increasingly using AI-related terms in their product branding, per Sensor Tower: “Over 200,000 apps across iOS and Google Play now promote AI features in their descriptions,” according to the company’s analysis. While terms like “AI-powered” are also popular, some app descriptions reference more specific use cases, such as “AI tutor.” Certain verticals also have their own trends in AI phrases used in app descriptions; in finance, for example, “AI investment” is a particularly popular one.

Apps that mention AI are projected to hit almost 10 billion downloads in H1 2026, per the report, with downloads increasing 25% year over year. (With that, the number of new generative AI apps has nosedived since a peak in H1 2023.) Apps that include AI-related terms in their descriptions will reach $12 billion in in-app purchase revenue in H1 2026, a 61% YoY increase.

May the best app win: When it comes to AI apps, ChatGPT still reigns supreme. It reached 1 billion monthly active users in May, the fastest an app has hit that many users, the report noted; ChatGPT also continues to see more unique monthly active users on the web and on mobile than its competitors.

However, it’s losing share in the AI assistant market, according to the report. ChatGPT’s share dropped below 50% for the first time in March. By May, it hovered at 46%; for comparison, Gemini sat at 28%. Claude upped its market share in the US to almost 14% by May, an increase from 5% in December.

Shopaholic: Generative AI is also giving a boost to brands in the form of the traffic it is bringing to their sites. The computers and consumer electronics category saw a roughly 4x increase in generative AI-referred traffic from Q4 2024 to Q1 2026, according to the report. (With that said, it still makes up a fractional amount of total traffic, at just 0.8%.)

Walmart and Target, both of which inked partnerships with ChatGPT toward the end of last year, saw AI traffic referrals climb to above 1.5% of total traffic, according to the report. Amazon, which has mostly blocked ChatGPT from crawling its site and is suing Perplexity over its shopping agent Comet’s activity on Amazon, is only seeing about 0.5% of generative AI referral traffic share.

“Although GenAI sources still account for less than 1% of total web traffic, they can play a meaningful role in driving brand awareness and influencing future purchase decisions,” the report read.