Sam Altman Declares "Code Red" at OpenAI as ChatGPT Faces Rising Competition from Google and Anthropic

OpenAI CEO Sam Altman has issued an urgent internal memo declaring a "code red" to refocus the company's resources on improving ChatGPT as competitive pressure from Google and Anthropic intensifies. The directive, sent to employees on Monday, marks exactly three years since ChatGPT's groundbreaking launch and signals a pivotal moment for the company that pioneered mainstream AI chatbots.

According to reports from The Wall Street Journal and The Information, Altman told staff the company must enhance ChatGPT's speed, reliability, and personalization features while expanding the range of questions it can answer. The move comes as Google's newly released Gemini 3 has won strong reviews and beaten ChatGPT on industry benchmark tests, threatening OpenAI's market dominance.

The timing of Altman's "code red" declaration is particularly striking. Three years ago, it was Google sounding the alarm when ChatGPT's November 2022 launch sent shockwaves through the tech industry. Google CEO Sundar Pichai declared his own "code red" in 2022, warning ChatGPT could threaten the future of Google Search. Now the tables have turned, with OpenAI on the defensive.

Google's Gemini 3, released in early November, has gained significant traction. Salesforce CEO Mark Benioff publicly announced he was switching from ChatGPT to Google's latest model, highlighting the shifting sentiment among enterprise users. Meanwhile, Anthropic released its Claude Opus 4.5 model on November 24, further intensifying competition in the chatbot space.

The competitive pressure extends beyond just Google and Anthropic. Meta continues investing billions in AI research, while Chinese startup DeepSeek has released two large open-source models that have disrupted the market with their performance and accessibility.

To execute the "code red" directive, Altman has delayed work on advertising, AI agents for health and shopping, and a personal assistant called Pulse. The company is encouraging temporary team transfers and establishing daily calls among employees responsible for ChatGPT improvements.

Nick Turley, OpenAI's head of ChatGPT, confirmed the strategic shift on social media Monday, stating the company's focus is "to keep making ChatGPT more capable, continue growing, and expand access around the world—while making it feel even more intuitive and personal."

The refocusing represents a departure from OpenAI's recent expansion into multiple product areas. The company had been exploring various revenue streams and new features, but is now consolidating efforts around its flagship product that serves over 800 million weekly users.

The urgency behind Altman's memo reflects OpenAI's challenging financial position. The company, valued at 500 billion dollars, doesn't make a profit and has committed more than one trillion dollars in financial obligations to cloud computing providers and chipmakers it relies on to power its AI systems.

OpenAI generates revenue primarily from ChatGPT Plus subscriptions, but most users access the free version. Unlike Google, which funds AI investments through its profitable advertising business, OpenAI must continually raise capital to sustain operations and development.

The company has set aggressive revenue targets, projecting growth from 13 billion dollars in 2025 to 200 billion dollars by 2030. Maintaining ChatGPT's market leadership is critical to achieving these ambitious goals and justifying its massive valuation to investors.

OpenAI's "code red" moment illustrates the breathtaking pace and intensity of the AI arms race. The company that sparked global fascination with generative AI just three years ago now finds itself fighting to maintain relevance against well-funded competitors.

The situation has been complicated by internal challenges as well. Dozens of top OpenAI researchers have departed for former CTO Mira Murati's Thinking Machines and for Meta's new Superintelligence Labs, taking valuable expertise with them.

Despite these pressures, Altman remains confident in OpenAI's ability to compete. His memo stated that OpenAI will release a new reasoning model next week that beats Google's Gemini 3 in internal evaluations, suggesting the company still has technical innovations in development.

For ChatGPT's 800 million weekly users, the "code red" initiative should translate into tangible improvements in their daily experience. OpenAI is prioritizing faster response times, more reliable performance, better personalization options, and expanded capabilities to handle a wider variety of questions and tasks.

The delay of advertising plans means users won't see ads integrated into ChatGPT in the near term, preserving the current user experience. However, OpenAI will eventually need additional revenue streams beyond subscriptions to achieve profitability.

The postponement of specialized AI agents for health and shopping, along with the Pulse personal assistant, means these advanced features won't arrive as soon as previously anticipated. OpenAI is betting that perfecting the core ChatGPT experience matters more than expanding into new product categories.

As the AI industry matures, competition is intensifying across multiple dimensions—model performance, user experience, pricing, enterprise features, and ecosystem partnerships. OpenAI's early-mover advantage from ChatGPT's launch has narrowed considerably, forcing the company to defend its position rather than simply leading from the front.

The "code red" declaration signals that OpenAI recognizes the existential nature of this competitive moment. With Google's resources, Anthropic's enterprise traction, Meta's open-source strategy, and emerging international competitors, maintaining ChatGPT's relevance requires focused execution and continuous improvement.

For the broader AI industry, OpenAI's defensive posture confirms that the generative AI market has moved beyond the early adoption phase into a mature competitive landscape where no single player can afford complacency.