Altman Issues Code Red at OpenAI over Google’s Gemini’s Latest Model

The undisputed dominance of OpenAI’s ChatGPT is now facing an existential threat, prompting CEO Sam Altman to reportedly declare an internal “code red” on Monday.

This emergency directive instructs the company to immediately halt numerous forward-looking initiatives and pivot all resources toward aggressively improving the performance and reliability of its flagship conversational product. The dramatic decision acknowledges that the startup’s once-unassailable lead in the generative AI race is rapidly eroding under intense competitive pressure from rivals, most notably Google and Anthropic.

The severity of the situation is reflected in the designation, which elevates the crisis beyond the previous “code orange” level. The need for decisive action comes as OpenAI spends billions annually on compute costs and talent, facing the dual pressures of intense technological competition and the need to achieve a highly ambitious, long-term profitability target.

In the internal memo, reported by The Wall Street Journal and The Information, Altman mandated that the pursuit of new revenue streams and applications must be temporarily sacrificed to focus on product stabilization. This strategic shift involves putting on hold several high-profile projects, such as:

• Monetization and Growth Initiatives: Development of integral monetization features, including the integration of advertisements (ads) within ChatGPT and the deployment of advanced AI-powered shopping features, has been delayed.
• Specialized AI Agents: The rollout of complex AI applications like health agents and the highly anticipated ChatGPT Pulse personal assistant has also been put on the back burner.

Instead, the company’s daily focus will now be entirely on core product refinement. Altman instituted a daily call for staff tasked with development and encouraged temporary team transfers to accelerate the work on essential features.

The focus areas are explicit: achieving greater speed and reliability, delivering better personalization, and enhancing the model’s broader question-answering capabilities through improved knowledge and reasoning.

The Competitive Threat of Gemini’s Surge and Structural Advantages

The urgency of the “code red” is directly attributable to the aggressive technological and market penetration achieved by competitors, completing a sharp role reversal from late 2022 when Google was forced into its own “code red” by ChatGPT’s arrival.

Altman congratulated Google last month, following the release of Gemini 3.

“Congrats to Google on Gemini 3! Looks like a great model,” he said.

The primary factors threatening OpenAI’s position are:

• Gemini 3’s Benchmark Dominance: Google’s latest model, Gemini 3 Pro, has leveraged its unique research strengths to achieve superior performance across critical benchmarks. It has surpassed OpenAI’s current GPT-5 model on several industry-standard tests, particularly those assessing complex reasoning tasks, visual interpretation, and multimodality. Gemini 3’s groundbreaking 1-million-token context window also provides a strategic advantage, allowing corporate clients and developers to process and reason over massive, previously unmanageable documents and codebases.
• Explosive User Base Growth: While OpenAI retains a large user base (reportedly 800 million weekly users), Google’s AI user base has seen explosive growth. Web analytics show users now spend more time with the Gemini interface, and the MAUs have surged from 450 million in July to 650 million in October. A major contributor to this growth was the viral success of the Nano Banana image generation and editing model (officially Gemini 2.5 Flash Image), which attracted over 10 million new users to the Gemini app and facilitated over 200 million image edits within weeks of its launch.
• Structural Cost Disadvantage: OpenAI operates at a structural disadvantage compared to Google. Google controls the “full stack,” including its own specialized TPU chips for cheap training and deployment, its Google Cloud infrastructure, and seamless integration across Search, Android (3 billion devices), and Workspace. Conversely, OpenAI relies on Microsoft’s cloud and expensive Nvidia chips, creating a higher operational cost base that makes it difficult to sustainably challenge rivals on pricing or achieve long-term profitability.

The pressure is further compounded by Anthropic’s Claude Opus 4.5 model, which consistently rivals or exceeds the performance of OpenAI’s current model in key tests. Altman has reportedly sought to reassure employees that a new reasoning model is in the pipeline, which he believes will surpass Gemini 3’s capabilities, but the immediate “code red” suggests the company cannot afford to wait for that next-generation model to arrive.