The competitive landscape of artificial intelligence has shifted dramatically once again. OpenAI CEO Sam Altman has reportedly announced a company-wide “code red,” signaling an urgent refocus on strengthening ChatGPT’s capabilities. According to a leaked internal memo, several planned initiatives—including advertising features, consumer-focused AI agents, and a digital assistant called Pulse—will be delayed so the company can devote resources exclusively to enhancing its flagship chatbot. Altman stressed that “we are at a critical time for ChatGPT,” urging employees to temporarily transfer teams and commit to daily progress calls aimed at accelerating upgrades.
This dramatic pivot reflects a moment of heightened pressure for OpenAI, triggered by the rising prominence of Google’s recently released Gemini 3 model. Gemini 3 has earned strong approval on performance metrics, even topping the LMArena leaderboard where users compare AI model outputs side by side. The widespread acclaim on social media has contributed to the impression that Gemini 3 is beginning to surpass ChatGPT in key areas, prompting OpenAI to react decisively.
A Reversal of Roles in the AI Race
The situation mirrors events from late 2022, though the roles have now reversed. When ChatGPT exploded in popularity shortly after launch, Google executives declared their own internal “code red,” reallocating teams and accelerating AI development in response to OpenAI’s momentum. That period kickstarted Google’s renewed investment into large-scale AI models, eventually culminating in the release of the Gemini series.
Three years later, the industry environment is far more complex, and OpenAI finds itself in the position once occupied by Google—reassessing priorities and redirecting talent in the face of growing competition. Gemini 3’s rapid rise and its strong reception have demonstrated how quickly leadership in AI can shift. Even prominent industry voices have added to the momentum. High-profile endorsements, including one from Salesforce CEO Marc Benioff, have lent further credibility to Gemini 3’s acceleration. His claim that he is “not going back” to previous AI tools after testing Google’s model captured the mood of many early adopters.
Growing Competition for Users
While ChatGPT still maintains an enormous user base—with more than 800 million weekly users—Google’s growth is notable. The Gemini app has expanded quickly, climbing from 450 million monthly active users in July to 650 million by October. The narrowing gap highlights a shifting balance of power as Google leverages its longstanding presence in the consumer market to push adoption across both mobile platforms and integrated services.
OpenAI’s reaction underscores the high stakes of maintaining its lead. With major companies and millions of users depending on its technology, the company cannot afford to lose ground. The “code red” mandate aims to reestablish ChatGPT’s dominance by prioritizing speed, accuracy, reasoning ability, and overall user experience.
Financial Pressure and Industry Expectations
Not everyone sees OpenAI’s urgent internal shift as a sign of crisis. Some analysts interpret the move as a consequence of the company’s ambitious scale and rapid pace of expansion. Critics argue that OpenAI may be overextending itself as it juggles product rollouts, enterprise partnerships, and large-scale model development. Despite its valuation surpassing $500 billion, the company continues to rely heavily on external funding.
Unlike Google—which offsets its AI expenses with profitable, long-established ad revenue—OpenAI faces a steeper financial climb. The Information recently reported that the company has taken on more than $1 trillion in long-term obligations related to cloud computing and chip supply contracts. These agreements secure the infrastructure necessary for model training and deployment but also place the company under substantial financial strain.
Yet the AI industry is defined by volatility. Innovation can change the competitive landscape in a matter of months, sometimes even weeks. Altman’s memo reportedly mentioned that OpenAI plans to unveil a new simulated reasoning model in the coming week, one that may outperform Gemini 3 in internal benchmarks. If accurate, this suggests the technology race is far from settled and that advancements will continue as long as investment capital fuels research and development.
How OpenAI Is Responding to the Competitive Shift
Here are the strategic steps the company is prioritizing during its “code red” phase:
- Temporarily shifting teams to focus exclusively on ChatGPT improvements.
- Holding daily progress meetings for groups responsible for key model upgrades.
- Delaying advertising integration and other nonessential product initiatives.
- Refining ChatGPT’s reasoning, speed, and accuracy to stay competitive.
- Preparing the rollout of a new simulated reasoning model expected to challenge Gemini 3.
