OpenAI is facing significant competitive pressure, primarily from Google’s new AI model, Gemini 3. In an internal memo, OpenAI’s chief executive Sam Altman declared a “code red” to improve ChatGPT, telling staff the company is at a “critical time.” He warned that the launch of Gemini 3, which has outperformed rivals on several benchmarks, could create “temporary economic headwinds” for OpenAI.
The new competition has been acknowledged by industry leaders. Salesforce CEO Marc Benioff wrote on Twitter that after using Gemini 3, he was “not going back” to ChatGPT, calling the performance leap “insane.”
While ChatGPT maintains a large user base of 800 million weekly users, OpenAI faces several challenges. The company is delaying plans for advertising to focus on product improvement. It also carries immense operational costs, having pledged to spend $1.4 trillion on computing power over the next eight years.
Google, in contrast, benefits from its established resources. According to the Financial Times, Google’s “full stack” approach, which includes its own custom processing chips, gives it a strategic advantage in developing and deploying its AI models without relying on costly third-party hardware.
Other companies are also gaining ground. Anthropic, founded by former OpenAI staff, is growing its enterprise business with its Claude chatbot, which is seen by some as a more reliable tool for corporate customers.
Sources: The Guardian, Financial Times
