Three years after ChatGPT shocked Google into emergency mode, the roles have reversed. Sam Altman has declared a 'Code Red' at OpenAI as Google's Gemini 3 surges in performance and user adoption.
San Francisco - The balance of power in the artificial intelligence sector witnessed a dramatic and symbolic reversal this week. Sam Altman, CEO of OpenAI, has reportedly declared a company-wide "Code Red," instructing staff to suspend non-essential projects and focus exclusively on improving the core performance of their flagship product, ChatGPT. The directive comes amid internal acknowledgments that Google's Gemini models, specifically the recently iterated Gemini 3, have begun to outpace OpenAI's offerings in critical industry benchmarks and user adoption metrics.
This development marks a pivotal moment in the generative AI arms race, effectively mirroring the events of late 2022. Three years ago, it was Google CEO Sundar Pichai who famously pulled the fire alarm, reorganizing the search giant's entire structure in response to the existential threat posed by ChatGPT's launch. Now, according to reports from The Wall Street Journal and The Information, the disruptor has become the defender, scrambling to protect its market dominance against a resurgence from Google AI.
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The internal memo, circulated on Monday, December 2, paints a picture of a company shifting to a war footing. According to Tom's Hardware and Fox Business, Altman's directive halts the development of revenue-generating features, specifically the planned rollout of advertising within ChatGPT, to reallocate resources toward model quality, speed, and reliability. The priority has shifted from monetization to technological survival.
The catalyst for this drastic measure appears to be twofold: benchmarks and user growth. Reports indicate that Google's Gemini has seen its monthly active users surge from 450 million in July to 650 million in October 2025. While OpenAI maintains a lead with approximately 800 million weekly users, the trajectory is alarming for the incumbent. Furthermore, internal testing reportedly suggests that Google's latest models are demonstrating superior capabilities in reasoning and multimodal processing.
"OpenAI faces an internal 'code red' as Google's Gemini surges ahead... Google's integrated infrastructure and custom chips give it a decisive edge." - The Times of India
To understand the gravity of Altman's declaration, one must contextualize it within the industry's recent history. In late 2022, ChatGPT was the black swan event that caught Silicon Valley off guard. Google, perceived as sluggish and bureaucratic, was forced to merge its Brain and DeepMind divisions to speed up execution. Sundar Pichai's "Code Red" was an admission that their core search business was vulnerable.
Today, the roles are reversed, highlighting the precarious nature of "moats" in AI development. OpenAI, once the agile startup, is now the establishment entity defending a massive user base. Google, having reorganized and leveraged its massive compute infrastructure and custom TPU chips, has managed to iterate rapidly. This oscillation of power suggests that no single company has yet secured a permanent technological advantage; rather, the industry is defined by leapfrog dynamics.
The pressure on OpenAI is not coming from Google alone. Reports from CNBC and Fox Business highlight that Anthropic's Claude models are also gaining ground, squeezing OpenAI from the side of safety-focused enterprise solutions. However, Google remains the primary antagonist due to its sheer scale. The integration of Gemini into the Android ecosystem and Google Workspace has provided a distribution channel that OpenAI, even with its Microsoft partnership, struggles to match in ubiquity.
Altman's move to pause advertising initiatives-a key revenue driver-signals that the battle for technological superiority still outweighs the pressure for immediate profitability. For the business sector, this reinforces the reality that Generative AI is still in an investment phase, not a maturity phase. Companies building on top of these models must remain agile, as the "best" underlying model changes every few months.
Politically, this intensifying competition may accelerate the release of more powerful models, potentially sidelining safety conversations in favor of speed. When major labs go into "Code Red," internal friction regarding safety protocols often increases. Regulators in Washington and Brussels will likely be watching closely to see if OpenAI's rush to counter Google leads to the release of less-tested capabilities.
Despite the alarmist nature of a "Code Red," OpenAI is not without a counterstrike. Forbes and eWEEK report that Altman's memo hints at a new "reasoning model" slated for release as early as next week. Internal metrics reportedly show this new model outperforming Google's latest Gemini iterations.
This suggests the industry is moving away from simple chatbots toward "reasoning agents" capable of complex, multi-step problem solving. As 2025 draws to a close, the narrative is no longer about who launched first, but who can iterate fastest. For Sam Altman and OpenAI, the next few weeks will be a critical test of whether they can maintain the lead they established three years ago, or if Google's massive resources have finally closed the gap.
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