I'm kind of surprised this didn't happen sooner.

From an ethical standpoint, I think it's .. murky. Not ads themselves, but because the AI is, at least partially, likely trained on data scraped from the web, which is then more or less regurgitated (in a personalized way) and then presented with ads that do not pay the original content creators. So it's kind of like, lets consume what other people created, repackage it, and then profit off of it.