This is clearly false. The screenshots in this Time article show gmail having advertising from day one.
IMO ads were a distraction to enable the data harvesting, which drove Adsense targeting. Even today, the ads I see on GMail are pretty low quality. Some lovelorn guy used my email address unintentionally to sign up for a 55+ dating site 3 years ago. The most targeted ads I get are for similar sites.
Of course YMMV.
It's not obviously false when advertising makes up something like 80%+ of their revenue:
GSuite exists, at least in part, to break down the model of the walled corporate intranet. There are just too many people behind the corporate veil to ignore; and as a bonus, the browsing and cloud app usage habits they develop at work will tend to translate to their usage habits at home.
Also, as noted by another responder, GMail has had ads since launch. I was a beta user from day 1, and I recall the ads.
Edit: worth noting the historical difficulty of getting open source software into the business environment because corporate purchasers were wary of anything that was "free"; putting a price on something makes it more palatable to corporate adoption.
This was before other GSuite components even existed.
This seems obviously false. Google clearly monetizes gsuite as a paid service, and "everyone uses the same service at home that they do at work" has clear advantages, whether or not there is advertising in your gmail. Advertising in (consumer) gmail came long after paid gsuite (or "google apps for domains", as they called it then - horrible).