OpenAI started the AI race in a full sprint while its competitors were still lacing up their shoes. Now, as it slows to a modest jog, those rivals are suddenly breathing down its neck.
What happened: OpenAI CEO Sam Altman sent a memo to staff this week declaring a “code red” mission to improve the quality of its flagship product, ChatGPT. While it works on that, it will delay its other projects, including advertising efforts, health and shopping AI agents, and its personal assistant, Pulse.
Why it’s happening: “Code red” is really just tech-speak for “Google’s caught up to us.” After Google released its Gemini 3 Model, which outperformed the newest version of ChatGPT in industry benchmark tests, Altman told staff to brace for "rough vibes" as they play catch-up.
Even before Gemini 3 dropped, OpenAI was reportedly seeing engagement decline (though it still boasts a healthy 800 million weekly users).
Meanwhile, Google’s monthly active users jumped from 450 million in July to 650 million in October, and Chinese startup Deepseek just released a new open source model that matches ChatGPT’s performance on a number of key benchmarks (at a fraction of the price).
Why it matters: OpenAI fired the starting gun of the AI race with the release of ChatGPT, giving it a huge head start over tech giants like Microsoft, Google, and Apple. But that lead is dissipating, and the startup appears to be on its back foot for the first time in a fight for survival — all without the war chests (a.k.a. profitable products) that its competitors have.—LA