OpenAI CEO Sam Altman has declared an internal code red after Google’s latest artificial intelligence model topped industry benchmarks and threatened the ChatGPT maker’s dominance, according to internal memos reported by The Wall Street Journal and The Information.
Altman recently told employees that the San Francisco, California-based company must urgently improve the quality of ChatGPT, marking a dramatic shift for the firm that pioneered mainstream artificial intelligence chatbots with its November 2022 launch. Altman wrote in the memo that the company is at a critical time for ChatGPT, acknowledging that Google’s resurgence poses serious challenges to OpenAI’s market position.
The emergency directive follows Google’s release of Gemini 3 on November 18, 2025, which achieved record-breaking scores on key artificial intelligence benchmarks. The model scored 37.4 on Humanity’s Last Exam benchmark, surpassing the previous high of 31.64 held by OpenAI’s GPT-5 Pro and topping the LMArena leaderboard, earning widespread acclaim from developers and users. Tulsee Doshi, Google’s head of product for Gemini, said the company is seeing a massive jump in reasoning with Gemini 3, highlighting the model’s unprecedented depth and nuance in responses. The Gemini app currently serves more than 650 million monthly active users, growing from 450 million in July, while 13 million software developers have integrated the model into their workflows.
Salesforce CEO Marc Benioff publicly declared his switch from ChatGPT after three years of daily use, stating he spent two hours on Gemini 3 and is not going back, describing the leap as insane, with everything sharper and faster. In response, Altman has pulled staff from other projects and established daily progress meetings focused solely on ChatGPT improvements. The company is delaying previously planned initiatives, including advertising integration, artificial intelligence agents for shopping and healthcare queries, and ChatGPT Pulse, a personalized assistant tool.
Altman warned employees about temporary economic headwinds caused by Google’s renewed surge and told staff he expects the vibes to be rough for a bit, according to The Guardian. The memo outlined specific areas for improvement, including enhanced personalization features for individual users, faster response times, improved reliability, and the ability to answer a broader range of questions.
ChatGPT maintains significant user engagement with more than 800 million weekly active users, but OpenAI faces mounting financial pressure. The company is not yet profitable and must rely on continued investment funding to sustain operations. OpenAI projects reaching more than $20 billion in annualized revenue this year, with ambitious plans to grow to hundreds of billions in sales by 2030. The company has committed more than $1.4 trillion in infrastructure spending over the next eight years to train and operate its systems, making sustained market leadership essential to justify these massive expenditures. OpenAI’s latest valuation reached $400 billion, but the capital-intensive nature of artificial intelligence development leaves little room for competitive setbacks.
Google holds several structural advantages over OpenAI in the escalating artificial intelligence competition. The search giant can integrate Gemini directly into its Chrome browser, Android operating system, and dominant Search platform, providing immediate distribution to billions of users. Google also designs its own artificial intelligence chips and generates enormous cash flow from its advertising business, which can fund expensive research and development without relying on external investors.
OpenAI also faces competition from Anthropic, which released Claude Opus 4.5 on November 24, 2025. Anthropic has demonstrated strong enterprise momentum, growing from less than 1,000 business customers two years ago to more than 300,000 today. The competitive pressure comes amid other challenges for OpenAI. The company’s August 2025 release of GPT-5 received mixed reviews, with users complaining the model felt clinical and showed reduced capabilities in mathematics and geography compared to previous versions. OpenAI updated the model approximately three months later to address these concerns.
Altman told employees that OpenAI will release a new reasoning model next week that outperforms Gemini 3 in the company’s internal evaluations. However, he acknowledged that ChatGPT still requires significant improvements to the overall user experience. Nick Turley, who leads ChatGPT product development, said the focus is on making ChatGPT more capable while continuing to expand access worldwide.
The current situation represents a reversal of roles from late 2022, when Google declared its own code red after ChatGPT’s viral launch disrupted the search market. CEO Sundar Pichai redirected teams across Google Research, Trust and Safety, and other departments to accelerate artificial intelligence product development, leading to the launch of Bard in early 2023 and its subsequent evolution into Gemini. Estimates suggest Gemini’s market share in generative artificial intelligence has doubled over the past year, with the platform’s app downloads catching up to ChatGPT’s numbers. Independent analysis shows Google beating OpenAI in brand growth speed as the competition intensifies between the two technology giants.