OpenAI chief Sam Altman has issued a „code red“ alert to staff as ChatGPT faces growing competition from rival AI products. According to The Guardian, Altman sent an internal memo to employees stating, „We are at a critical time for ChatGPT.“ The company is now devoting more resources to improving its flagship chatbot, which serves 800 million weekly users.
Google’s Gemini 3 Creates Pressure
OpenAI has been rattled by the success of Google’s latest AI model, Gemini 3. The model has outperformed rivals on various benchmarks and attracted high-profile users. Marc Benioff, chief of Salesforce, announced on X that he switched to Gemini 3 after three years of daily ChatGPT use. He wrote that the new model’s „reasoning, speed, images, video“ made it superior.
Last month, Altman warned staff that Gemini 3 could create „temporary economic headwinds“ for OpenAI. He added, „I expect the vibes out there to be rough for a bit.“ Google’s search business gives it substantial financial resources and data to invest in AI tools. This puts pressure on OpenAI, which lacks the same cash flow support.
Advertising Plans Delayed
OpenAI is delaying plans to add advertising to ChatGPT. The company wants to focus on improving the chatbot, which celebrated its third birthday last month. Nick Turley, head of ChatGPT, pledged to make the product „more capable“ and expand global access.
Revenue Growth and Funding Challenges
Despite lacking the resources of rivals like Google, Meta, and Amazon, OpenAI has received funding from SoftBank and Microsoft. The company reached a $500 billion valuation in its latest round, up from $157 billion in October. OpenAI is loss-making but expects annual revenues over $20 billion this year.
Altman projects revenues will reach „hundreds of billions“ by 2030. The startup has committed to spending $1.4 trillion on datacentre costs over eight years. Altman said last month that the risk of not having enough computing power is greater than having too much. Apple also responded to competitive pressures by naming Amar Subramanya, a Microsoft executive, as its new vice president of AI.
