Sam Altman Declares Code Red at OpenAI Amid Competition

Sam Altman has declared a code red at OpenAI, as the company faces heightened competition from Google's latest AI model, Gemini 3. According to a report by tech news site The Information, Altman sent an internal memo to staff stating, 'We are at a critical time for ChatGPT.' OpenAI has been unsettled by the success of Gemini 3, which has reportedly outperformed competitors on various benchmarks.

Altman warned that the launch of Gemini 3 could lead to temporary economic headwinds for OpenAI, saying, 'I expect the vibes out there to be rough for a bit.' Despite ChatGPT boasting 800 million weekly users, Google's robust financial resources, bolstered by its profitable search business, pose a significant challenge.

Salesforce CEO Marc Benioff recently expressed his preference for Gemini 3 over ChatGPT, emphasizing the superior performance he experienced, stating, 'The leap is insane reasoning, speed, images, video ... everything is sharper and faster.' In response to the competitive pressures, OpenAI is postponing plans to introduce advertising in ChatGPT to focus on enhancing the chatbot's capabilities.

Nick Turley, Head of ChatGPT, celebrated the product's third anniversary on X, promising to continue making ChatGPT more intuitive and capable while expanding its global reach. Although OpenAI lacks the cash flow enjoyed by rivals like Google, Meta, and Amazon, it has secured significant funding from SoftBank and Microsoft, raising its valuation to $500 billion, a substantial increase from $157 billion last October.

Altman expects OpenAI to generate over $20 billion in annual revenue, with projections to grow into the hundreds of billions by 2030. The company plans to invest $1.4 trillion in data center costs over the next eight years, emphasizing its commitment to revenue growth.

Altman recently highlighted the potential risks of insufficient computing power, stating, 'the risk of OpenAI not having enough computing power is more significant and more likely than the risk of having too much.' Additionally, Apple has appointed Amar Subramanya as its new vice president of AI, a move strategized to enhance its competitive position in the AI landscape.

Subramanya, a former Microsoft executive, replaces John Giannandrea and previously led engineering for the Gemini assistant at Google. Apple's delay in rolling out AI improvements for its voice assistant Siri until 2026 further illustrates the competitive dynamics currently shaping the industry.