Code Red

OpenAI CEO Sam Altman declared a "code red" at the company in an effort to improve ChatGPT following increased competition with Google.

Context

ChatGPT launched three years ago and helped establish OpenAI as a leader in the AI industry, with over 800M weekly users. However, the company now faces increased competition from rivals, particularly Google, which released its Gemini 3 model last month, leading to a rise in Google's stock price following the announcement.

Internal Memo

The Wall Street Journal reported on Tuesday that Altman sent an internal memo to OpenAI staff declaring a “code red” to improve ChatGPT's speed, reliability, and personalization features.

Altman said the company would delay other initiatives, including plans to integrate advertising into ChatGPT, AI shopping assistants, and a personal assistant product called Pulse. Altman encouraged employees to temporarily transfer to teams working on ChatGPT improvements and stated that the company would hold daily calls for those responsible for enhancing the chatbot.

Growing Competition

Both Google’s Gemini 3 and Anthropic's latest AI model surpassed OpenAI on certain industry benchmark tests.

Gemini’s monthly active users have grown from 450M in July to 650M as of October – before the release of Gemini 3. Data from web analytics companies showed that people now spend more time chatting with Gemini than ChatGPT, though OpenAI still maintains a dominant market share in overall chatbot usage.

Financial Challenges

Despite its rapid growth and ability to generate significant revenue, OpenAI continues to operate at a loss.

The company must continuously fundraise to sustain operations, which puts it at a disadvantage compared to companies like Google that can fund AI development from existing revenue streams. Although it spends more than competitors like Anthropic, OpenAI’s financial projections show it would need to grow revenue to approximately $200B by 2030 in order to turn a profit.