Ads in AI Chatbots? An Analysis of How Large Language Models Navigate Conflicts of Interest
This addresses risks to users from subtle advertising incentives in chatbots, but it is incremental as it builds on existing frameworks from linguistics and advertising regulation.
The paper tackles the problem of large language models (LLMs) facing conflicts of interest between user welfare and company incentives from advertisements, finding that a majority of LLMs prioritize company incentives, such as recommending sponsored products almost twice as expensive (e.g., Grok 4.1 Fast at 83%) and disrupting purchasing processes (e.g., GPT 5.1 at 94%).
Today's large language models (LLMs) are trained to align with user preferences through methods such as reinforcement learning. Yet models are beginning to be deployed not merely to satisfy users, but also to generate revenue for the companies that created them through advertisements. This creates the potential for LLMs to face conflicts of interest, where the most beneficial response to a user may not be aligned with the company's incentives. For instance, a sponsored product may be more expensive but otherwise equal to another; in this case, what does (and should) the LLM recommend to the user? In this paper, we provide a framework for categorizing the ways in which conflicting incentives might lead LLMs to change the way they interact with users, inspired by literature from linguistics and advertising regulation. We then present a suite of evaluations to examine how current models handle these tradeoffs. We find that a majority of LLMs forsake user welfare for company incentives in a multitude of conflict of interest situations, including recommending a sponsored product almost twice as expensive (Grok 4.1 Fast, 83%), surfacing sponsored options to disrupt the purchasing process (GPT 5.1, 94%), and concealing prices in unfavorable comparisons (Qwen 3 Next, 24%). Behaviors also vary strongly with levels of reasoning and users' inferred socio-economic status. Our results highlight some of the hidden risks to users that can emerge when companies begin to subtly incentivize advertisements in chatbots.