Sam Altman, the chief executive of OpenAI, has reportedly declared a state of emergency within the company, issuing a stark 'code red' directive to employees. The urgent call to action comes as the firm's flagship product, ChatGPT, contends with mounting pressure from rival artificial intelligence systems, most notably Google's newly launched Gemini 3 model.
Internal Memo Reveals 'Critical Time' for ChatGPT
According to a report from the tech news site The Information, Altman circulated an internal memo stating that OpenAI is at a 'critical time' for ChatGPT. The San Francisco-based startup has been visibly shaken by the successful debut of Google's advanced AI, which has outperformed competitors on various industry benchmarks. In response, OpenAI is now channelling significant internal resources into enhancing its own chatbot's capabilities.
Last month, Altman warned staff that the launch of Gemini 3 could generate 'temporary economic headwinds' for OpenAI. He candidly added that he expected 'the vibes out there to be rough for a bit', acknowledging the challenging competitive landscape ahead. Despite boasting an impressive 800 million weekly users, ChatGPT is up against a rival with the immense financial muscle, data resources, and profitability of Google's search business.
High-Profile Defections and Strategic Shifts
The competitive threat was underscored last month when Marc Benioff, CEO of the $220bn software giant Salesforce, publicly switched his allegiance. After testing Gemini 3 for two hours, Benioff declared on X that he was 'not going back' to ChatGPT, praising Google's model for its superior reasoning, speed, and handling of images and video.
In light of this intense rivalry, OpenAI has decided to delay plans to introduce advertising within ChatGPT, choosing instead to focus all efforts on improving the core product. This strategic pivot was confirmed as the chatbot celebrated its third anniversary. Nick Turley, the head of ChatGPT, marked the occasion by pledging on X to break new ground, focusing on making the tool more capable, intuitive, and personal for its global user base.
Financial Firepower and Future Ambitions
OpenAI operates at a significant financial disadvantage compared to tech titans like Google, Meta, and Amazon—a major backer of competitor Anthropic. However, it has secured substantial funding from investors including SoftBank and Microsoft, propelling its valuation to a staggering $500bn in its latest round, up from $157bn in October 2023.
The company remains loss-making but projects annual revenues exceeding $20bn by the end of this year. Altman has forecast that this figure will grow into the 'hundreds of billions' by 2030. This ambitious growth is essential to support the company's colossal commitment to spend $1.4tn on datacentre costs over the next eight years to train and operate its AI systems. Altman has argued that the risk of not having enough computing power is greater than the risk of having too much.
The competitive fervour is reshaping the entire sector. In a related move, Apple has responded by appointing a new vice president of AI, Amar Subramanya, poaching him from Microsoft. Subramanya, who previously spent 16 years at Google working on the Gemini assistant, is tasked with accelerating Apple's AI efforts, which have lagged behind rivals like Samsung.
