OpenAI Shifts Strategy, Booking.com and Expedia Surge

Not so long ago, OpenAI would announce a grand expansion, and stocks in the relevant sector would swoon. Now, the opposite is happening.

News broke overnight that OpenAI is backing off from handling bookings and other purchases directly on ChatGPT. Instead, the AI startup is opting to push transactions into third-party apps. That sent shares of online travel agents Expedia and Booking.com soaring on Thursday.

The shift, reported by The Information, amounts to a notable strategic retreat. OpenAI had been testing integrated checkout features inside ChatGPT, allowing users to book hotels or buy products without leaving the chatbot.

Now, the company is evolving its commerce strategy and moving its Instant Checkout feature into apps run by other companies, where purchases can happen more seamlessly, according to a TD Cowen research note published on Thursday.

The TD Cowen analysts called this a “stunning admission.”

“The news signals that AI platforms replacing apps to become the ‘new OS’ is either not playing out, or at a minimum is pushed back significantly,” they wrote in Thursday’s note to investors.

In plain terms, OpenAI appears to have concluded it doesn’t want to handle the messy parts of commerce: payments, cancellations, refunds, customer service complaints, and the logistical headaches of booking trips. Those tasks are operationally complex, less profitable, and difficult to scale — especially for a company focused on the increasingly competitive business of building and running AI models.

Online travel agents, or OTAs, in particular, have significant responsibilities and legal obligations that chatbots and search engines don’t have. Broadly, OTAs act as direct contractual intermediaries with liability for bookings, customer service, and the accuracy of their listings and prices. (You only need to look at the travel chaos in Dubai right now to know how messy it can get if you’re responsible for someone’s disrupted trip).

There’s precedent for this. In the 2010s, Google and several travel metasearch sites tried to insert themselves into the booking flow. Google launched “Book on Google” in 2015 and ultimately shut it down in 2022 after failing to gain traction. Even Google, the most powerful internet company on earth, decided this was too much of a pain in the butt.

Beyond the messiness: Consumers, it turns out, may actually prefer completing transactions with established online travel agencies, which often offer broader inventory and higher conversion rates.

TD Cowen’s analysts said OpenAI’s admission that users are rejecting direct bookings “may signal major OTA sentiment reversal,” easing fears that AI would disintermediate travel intermediaries.

Booking.com jumped about 8% on Thursday, while Expedia soared almost 13%.

OpenAI didn’t respond to a request for comment Thursday morning.

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