As AI providers increasingly explore advertising within generative AI systems, they face a fundamental tension between monetization and users' adoption. This research examines how, when, and why advertising disclosure in generative AI responses influences users' trust in the AI system. We argue that advertising disclosure can undermine users' trust by reducing perceived AI neutrality, and this negative effect depends on the disclosure format.When disclosure is attached to the target product that users explicitly seek in a generative AI query, it reduces both trust in the AI system and trust in the advertised product. In contrast, when disclosure is attached to a non-target product presented after an organic recommendation for the target product, it decreases trust in the advertised recommendation but does not significantly diminish trust in the AI model overall. Our claims are supported by results from three laboratory experiments. Taken together, our findings offer theoretical insights into trust formation in AI-mediated decisionmaking and provide practical guidance for the design and monetization using advertising of generative AI systems.