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Openai·Software Engineer·Onsite - System Design / Architecture·Senior

SeniorPrefer not to say
Jul 2026

Summary

System design round at OpenAI for a software engineer role, focused entirely on building an online ad serving system from scratch. Pretty brutal scope, they wanted everything from auction mechanics to GDPR compliance in one session.

Questions Asked (8)

Q1

Design an end-to-end online ad serving system that returns targeted ads within 100ms, covering campaign management, budgets, pacing, frequency capping, targeting, real-time auctions, and near-real-time reporting.

System DesignTechnical Trade-offs
Author's notes

The 100ms constraint is the first thing that should shape every decision you make, and I didn't anchor on it hard enough early on.

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AI HintsAI Generated

Suggested Approach

Start by clarifying requirements and scale, then walk through the high-level architecture from ad creation to serving and reporting. Focus on the critical path for ad serving (targeting, auction, pacing) and explain how you meet the 100ms latency budget with caching, efficient data structures, and asynchronous processing. Finally, discuss trade-offs and how you would handle scale and failures.

Pro tip: Emphasize the separation of the write path (campaign management, budget updates) from the read path (ad serving) and how you use eventual consistency for reporting without impacting latency. Also, mention that you would use a fast in-memory store for real-time budget and pacing counters.

1. Clarify Requirements and Scale

Ask questions to understand expected QPS, number of active campaigns, targeting dimensions, latency SLA, and reporting freshness. This shapes the design and trade-offs.

2. High-Level Architecture

Outline the main components: campaign management service, ad serving service, real-time auction, budget/pacing service, frequency capping, and reporting pipeline. Explain data flow from ad creation to serving and logging.

3. Deep Dive into Ad Serving Path

Detail how an ad request is processed within 100ms: user targeting, candidate retrieval, auction, budget/pacing checks, frequency capping, and ad selection. Discuss caching, indexing, and parallel processing.

4. Budget, Pacing, and Frequency Capping

Explain how budgets are tracked in real-time (e.g., using Redis or a distributed counter), how pacing algorithms work (e.g., probabilistic throttling), and how frequency capping is enforced with low-latency storage.

5. Reporting and Trade-offs

Describe the near-real-time reporting pipeline (e.g., stream processing with Kafka and Flink) and discuss trade-offs between consistency, latency, and cost. Also cover failure handling and scalability.

Key Points to Mention

  • Use of in-memory data stores (e.g., Redis) for real-time budget and frequency capping to meet latency.
  • Targeting via inverted index or bitmap indexing for fast candidate retrieval.
  • Auction mechanics: second-price auction, bid shading, and latency considerations.
  • Pacing algorithms: even pacing, ahead-of-schedule pacing, and probabilistic throttling.
  • Asynchronous logging and stream processing for near-real-time reporting without impacting serving latency.
  • Horizontal scalability and fault tolerance: sharding, replication, and graceful degradation.

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.

Q2

Walk through the API design for an ad request and response, and define the core data models for campaigns, bids, and user targeting.

API & IntegrationsData Modeling
Author's notes

Went fine mostly.

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AI HintsAI Generated

Suggested Approach

Start by clarifying the scope and requirements of the ad request/response API, then walk through the request and response structures, and finally define the core data models for campaigns, bids, and user targeting. Emphasize scalability, low latency, and data consistency throughout.

Pro tip: Highlight trade-offs between real-time bidding and budget pacing, and discuss how you would handle high throughput with caching and async processing. Mentioning idempotency and error handling shows production maturity.

1. Clarify Requirements and Constraints

Ask about expected QPS, latency SLAs, data consistency needs, and whether the API is for real-time bidding or batch processing. This ensures your design aligns with business goals.

2. Design the API Contract

Define the request (e.g., user context, ad slot info, targeting parameters) and response (e.g., selected ad, bid price, tracking URLs) with clear field names and types. Consider using REST or gRPC and specify error codes.

3. Define Core Data Models

Outline schemas for Campaign (id, budget, schedule, status), Bid (campaign_id, amount, targeting criteria), and User Targeting (demographics, interests, behavior). Discuss relationships and indexing.

4. Address Scalability and Performance

Explain how you would handle high throughput with caching, sharding, and async processing. Discuss trade-offs between consistency and latency, and how to ensure idempotency.

5. Discuss Monitoring and Evolution

Mention logging, metrics, and alerting for the API. Talk about versioning, backward compatibility, and how to evolve the data models over time.

Key Points to Mention

  • Request/response schema design with clear field types and validation
  • Campaign model: budget, schedule, status, and pacing strategy
  • Bid model: bid amount, targeting criteria, and auction mechanics
  • User targeting: demographics, interests, behavior, and privacy considerations
  • Scalability: caching, sharding, async processing, and idempotency
  • Error handling, monitoring, and API versioning

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.

Q3

Describe the overall system architecture including edge gateways, ad selector, feature store, model service, auctioneer, throttling and pacing service, caching, and the logging pipeline.

System DesignTechnical Trade-offs
Author's notes

This is where I spent most of my time.

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AI HintsAI Generated

Suggested Approach

Start by clarifying the scope and requirements of the ad delivery system, then present a high-level architecture that covers all mentioned components, explaining how they interact. Focus on data flow and trade-offs, and be prepared to dive deeper into any component if asked.

Pro tip: Emphasize the importance of low-latency and high-throughput in ad serving, and discuss how you would monitor and optimize each component. Show awareness of failure modes and how to design for resilience.

1. Clarify Requirements and Scope

Ask clarifying questions to understand scale, latency requirements, and key constraints. Confirm whether this is for real-time bidding, ad selection, or both.

2. High-Level Architecture Overview

Sketch the main components and their interactions: edge gateways handle incoming requests, ad selector chooses ads, feature store provides features, model service runs ML models, auctioneer runs the auction, throttling and pacing service controls ad delivery, caching improves performance, and logging pipeline captures data.

3. Deep Dive into Critical Components

Explain the role of each component in detail, focusing on how they work together to meet latency and throughput goals. Discuss trade-offs such as consistency vs. availability in the feature store, or model complexity vs. inference speed.

4. Data Flow and Integration

Describe the end-to-end flow: from user request hitting edge gateway, to ad selection, feature retrieval, model scoring, auction, throttling, and finally logging. Highlight where caching is used and how data is passed between services.

5. Scalability, Reliability, and Monitoring

Discuss how the system scales horizontally, handles failures (e.g., fallbacks if model service is down), and how logging pipeline supports monitoring and debugging. Mention any trade-offs made for scalability.

Key Points to Mention

  • Edge gateways: handle request routing, authentication, rate limiting, and possibly A/B testing.
  • Feature store: low-latency access to user and ad features, with consistency guarantees and caching.
  • Model service: serves ML models for prediction (e.g., CTR), with considerations for model versioning and latency.
  • Auctioneer: runs real-time auction (e.g., second-price), integrates with pacing and throttling.
  • Throttling and pacing: controls ad delivery to meet budget and pacing goals, often using token buckets or PID controllers.
  • Logging pipeline: captures events for billing, analytics, and model training, with stream processing and storage.

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.

Q4

Which auction mechanism would you choose and why? How does your choice affect advertiser incentives?

Pricing & MonetizationTechnical Trade-offs
Author's notes

Second-price auction, said it immediately.

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AI HintsAI Generated

Suggested Approach

Start by clarifying the context—what is being auctioned (e.g., ad slots, API access) and the goals (revenue, efficiency, fairness). Then compare mechanisms like first-price, second-price, and VCG, and recommend one with justification. Finally, explain how your choice shapes advertiser incentives (e.g., truthful bidding, bid shading).

Pro tip: Acknowledge that no auction is perfect; discuss trade-offs and suggest hybrid or practical adjustments (e.g., reserve prices, pacing) to mitigate weaknesses. This shows real-world engineering judgment.

1. Clarify the auction context and objectives

Identify what is being auctioned, the number of bidders, and the primary goals (e.g., revenue maximization, allocative efficiency, simplicity). This sets the stage for mechanism choice.

2. Compare candidate auction mechanisms

Briefly outline options like first-price, second-price (Vickrey), and VCG, highlighting their theoretical properties (e.g., incentive compatibility, efficiency) and practical challenges.

3. Select and justify a mechanism

Choose one mechanism (e.g., second-price) and explain why it aligns with the context and goals, referencing trade-offs such as simplicity vs. optimality.

4. Analyze incentive effects on advertisers

Explain how the chosen mechanism influences bidding behavior: does it encourage truthful bidding, bid shading, or strategic manipulation? Discuss implications for revenue and efficiency.

5. Address practical considerations and mitigations

Mention real-world adjustments (e.g., reserve prices, pacing, fraud detection) and how they interact with incentives, showing awareness of engineering constraints.

Key Points to Mention

  • Second-price auction incentivizes truthful bidding (dominant strategy) but may lead to lower revenue in practice due to bid shading in first-price equivalents.
  • VCG mechanism is efficient and truthful but can be complex, vulnerable to collusion, and may suffer from low revenue.
  • First-price auctions require bid shading, leading to strategic complexity and potential inefficiency.
  • Advertiser incentives: truthfulness vs. strategic bidding, risk aversion, and budget constraints.
  • Trade-offs: revenue vs. efficiency, simplicity vs. optimality, and computational feasibility.
  • Practical mitigations: reserve prices, bidder verification, pacing, and machine learning to predict bids.

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.

Q5

How would you handle the cold start problem for new advertisers or new ad creatives with no historical performance data?

Product Sense & IdeationTechnical Trade-offs
Author's notes

Talked about prior-based initialization using similar campaigns, content-based features from the creative itself, and a short exploration phase with UCB-style allocation.

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AI HintsAI Generated

Suggested Approach

Start by framing the cold start problem as a classic exploration-exploitation trade-off, then propose a multi-pronged strategy that combines content-based signals, contextual bandits, and transfer learning. Emphasize how you would measure success and iterate, while being mindful of the unique constraints of an AI-driven ads system at OpenAI.

Pro tip: Show that you understand the business impact: cold start isn't just a technical problem; it directly affects advertiser ROI and platform revenue. Mention that you'd prioritize solutions that quickly gather signal without sacrificing user experience or ad quality.

1. Define the problem and constraints

Clarify what 'cold start' means in this context: new advertisers with no campaign history, new creatives with no performance data, and possibly new ad formats. Discuss constraints like latency, privacy, and the need for real-time bidding.

2. Leverage content-based and contextual signals

Use features from the ad creative (text, image, video embeddings) and advertiser metadata (industry, target audience) to make initial predictions. For example, use a pre-trained model to embed creatives and match with similar historical ads.

3. Apply exploration strategies

Implement a multi-armed bandit or Thompson sampling approach to allocate a small portion of traffic to new ads, balancing exploration and exploitation. Use contextual bandits to personalize exploration based on user and ad features.

4. Utilize transfer learning and meta-learning

Train a model on existing advertisers/creatives and fine-tune for new ones. Meta-learning can help the model quickly adapt to new tasks with few examples. Consider using OpenAI's models for few-shot learning.

5. Measure, iterate, and set guardrails

Define metrics like click-through rate, conversion rate, and revenue lift. Set up A/B tests to compare strategies. Implement guardrails to prevent poor user experience, such as capping exploration traffic and using quality scores.

Key Points to Mention

  • Exploration-exploitation trade-off and multi-armed bandits
  • Content-based filtering using embeddings from ad creatives
  • Transfer learning and meta-learning to leverage existing data
  • Contextual features (user, time, device) to improve predictions
  • Online learning and real-time feedback loops
  • Evaluation metrics and guardrails to protect user experience

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.

Q6

What's your strategy for A/B testing in an ad serving system, especially given auction dynamics and budget interference between variants?

A/B Testing & ExperimentationSystem Design
Author's notes

Trickier than a standard product A/B test because budget pacing and auction competition can leak between experiment arms.

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AI HintsAI Generated

Suggested Approach

Start by framing the core challenge: A/B tests in ad auctions are not independent because variants compete for the same budget and influence auction outcomes. Then propose a design that isolates treatment effects using techniques like budget-split randomization, switchback experiments, or counterfactual logging, and discuss how to measure incremental impact despite interference.

Pro tip: Emphasize that in auction systems, the 'stable unit treatment value assumption' (SUTVA) is often violated, so you need to either design around interference or explicitly model it—mentioning this shows deep understanding.

1. Clarify the goal and constraints

Identify what you're testing (e.g., ranking model, bid strategy) and the constraints: shared budget, auction dynamics, and potential interference between variants.

2. Choose a randomization unit

Decide whether to randomize at user, session, or auction level, considering that budget and auction competition can cause spillover effects between units.

3. Design to mitigate interference

Use techniques like budget-split (separate budgets per variant), switchback experiments (time-based alternation), or cluster randomization to reduce interference.

4. Measure and analyze correctly

Account for interference in analysis using methods like difference-in-differences, instrumental variables, or counterfactual logging to estimate incremental lift.

5. Validate and iterate

Run A/A tests, check for budget depletion, and monitor auction metrics to ensure the experiment is valid and results are actionable.

Key Points to Mention

  • SUTVA violation and interference in auction systems
  • Budget splitting or separate budgets per variant to isolate effects
  • Switchback experiments for time-based randomization
  • Counterfactual logging or shadow mode to measure incremental impact
  • Cluster randomization to reduce spillover
  • Difference-in-differences or causal inference methods for analysis

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.

Q7

How would you approach privacy and compliance requirements like GDPR and CCPA in this system, particularly around user targeting and data retention?

System DesignTechnical Trade-offs
Author's notes

Covered consent signals at the request layer, data minimization in the feature store, and right-to-erasure propagation through the logging pipeline.

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AI HintsAI Generated

Suggested Approach

Start by acknowledging that privacy and compliance are not afterthoughts but core design principles, especially at a company like OpenAI. Then, walk through a structured approach that covers data minimization, user consent, access controls, and retention policies, while balancing technical feasibility and business needs. Emphasize that you would collaborate with legal and privacy teams to translate requirements into technical specifications.

Pro tip: Demonstrate awareness that GDPR and CCPA have nuanced differences (e.g., GDPR's lawful basis vs. CCPA's opt-out for sale of data) and that compliance is an ongoing process, not a one-time checkbox. Mention that you would design for privacy by default and by design, and consider data localization and cross-border transfer mechanisms.

1. Identify and Classify Data

Determine what user data is collected, how it's used for targeting, and which data is subject to GDPR/CCPA. Classify data by sensitivity and retention requirements.

2. Implement Privacy by Design

Incorporate data minimization, purpose limitation, and consent mechanisms into the system architecture. Ensure user targeting respects opt-in/opt-out preferences and anonymizes data where possible.

3. Enforce Access and Retention Policies

Design role-based access controls and automated retention schedules. Implement deletion and anonymization workflows to honor user requests (e.g., right to be forgotten).

4. Monitor and Audit Compliance

Set up logging, auditing, and regular reviews to ensure ongoing compliance. Use tools to track data flows and detect policy violations.

5. Collaborate with Legal and Iterate

Work closely with legal teams to interpret regulations and adapt as laws evolve. Build feedback loops to update technical measures accordingly.

Key Points to Mention

  • Data minimization and purpose limitation
  • Consent management and user rights (access, deletion, portability)
  • Anonymization and pseudonymization techniques
  • Retention policies and automated data deletion
  • Cross-border data transfer mechanisms (e.g., SCCs, Privacy Shield)
  • Auditing, logging, and accountability

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.

Q8

How would you estimate capacity requirements for this system? Walk through a back-of-the-envelope calculation for request volume, storage, and infrastructure.

System DesignProduct Analytics & Metrics
Author's notes

Did the math out loud: assumed a few billion ad requests per day, worked backwards to QPS, then estimated feature store read throughput and log ingestion volume.

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AI HintsAI Generated

Suggested Approach

Start by clarifying the system's scope and key assumptions (e.g., user base, request types, data size). Then walk through a structured back-of-the-envelope calculation for request volume, storage, and infrastructure, using round numbers and stating your reasoning at each step. Conclude by discussing how you would validate and refine these estimates.

Pro tip: Always state your assumptions explicitly and use powers of 10 to simplify calculations. This shows you can think quantitatively and communicate clearly, which is crucial for system design at scale.

1. Clarify scope and assumptions

Ask clarifying questions to understand the system's purpose, expected user base, request patterns, and data retention requirements. State any assumptions you make.

2. Estimate request volume

Calculate the number of requests per second (RPS) by estimating daily active users, average requests per user per day, and peak traffic multipliers.

3. Estimate storage requirements

Determine data size per request or user action, multiply by volume, and factor in replication, backups, and retention policies to get total storage needs.

4. Estimate infrastructure needs

Translate request volume and storage into compute, memory, and network requirements. Consider server capacity, database sharding, and caching layers.

5. Validate and refine

Discuss how you would validate estimates with benchmarks, load testing, or monitoring, and how you would adjust as real usage data comes in.

Key Points to Mention

  • Use of round numbers and powers of 10 for simplicity
  • Consideration of peak vs. average load
  • Data replication and redundancy factors
  • Caching and CDN to reduce load
  • Database partitioning/sharding strategies
  • Cost implications and trade-offs

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.