OpenAI Declares 'Code Red' Amidst Intensified AI Competition

2025-12-03 companies

San Francisco, Tuesday, 2 December 2025.
In response to Google’s advancements, OpenAI’s CEO Sam Altman has declared a ‘code red’ to prioritize improvements to ChatGPT, focusing on speed and personalization over other projects.

The Strategic Shift in OpenAI’s Focus

OpenAI, under the leadership of CEO Sam Altman, has declared a ‘code red’ to address growing competition from Google’s Gemini 3 AI model. This urgent directive, outlined in an internal memo on December 1, 2025, prioritizes enhancements to ChatGPT, specifically targeting its speed, reliability, and personalization capabilities [1][3]. The ‘code red’ status signals a significant strategic pivot, with OpenAI postponing other projects such as advertising and AI applications for health and shopping to concentrate resources on ChatGPT’s improvement [2][4].

Google’s Advancements and Their Impact

The competitive pressure stems from Google’s Gemini 3, which has outperformed ChatGPT in several crucial benchmarks, including the ‘Humanity’s Last Exam’ [3][5]. Google announced the launch of Gemini 3 on November 1, 2025, and it quickly gained traction with 650 million monthly active users by October 2025, compared to ChatGPT’s 800 million weekly active users [2][6]. This competition has pressured OpenAI to innovate and maintain its leadership in the AI field.

Financial and Operational Challenges

OpenAI faces significant financial and operational challenges despite its impressive user base and recent $500 billion valuation. The company expects to end 2025 with over $20 billion in annual revenue, yet it is not currently profitable [2][4]. OpenAI has committed to spending $1.4 trillion on data center costs over the next eight years to train and operate its AI systems, a move necessary to support its ambitious growth plans [2].

Future Outlook for OpenAI

Looking ahead, OpenAI plans to launch a new reasoning model on December 8, 2025, as part of its effort to enhance ChatGPT’s capabilities [5]. This development is crucial for OpenAI to catch up with Google’s advancements and to continue its expansion globally. The urgency of these improvements underscores OpenAI’s commitment to maintaining its competitive edge in the rapidly evolving AI landscape [2][3][5].

Sources

OpenAI AI competition