OpenAI Faces ‘Code Red’ Pressure from Rivals and Rising Liabilities
Sam Altman, OpenAI’s CEO, sent an internal memo declaring a “code red” this week. The alert ranks as the company’s highest priority level, triggered by rivals like Google’s Gemini 3 topping benchmarks. OpenAI now pulls resources to catch up on ChatGPT while dealing with a recent data breach and legal pushback over user safety claims. Reports from CNBC, The Independent, and Mint lay out the scramble.
Rivals Pull Ahead
Google’s Gemini 3, launched last month, set records on tests like Humanity’s Last Exam. It now has 650 million monthly active users, plus 2 billion through Google Search integrations, per Similarweb data cited by The Independent. Salesforce CEO Marc Benioff switched after testing it, calling the jump “insane.”
Anthropic also gains traction: over 300,000 business customers as of September, with large accounts up sevenfold in a year, CNBC reports. OpenAI’s ChatGPT holds 800 million weekly users but sees rivals eat into time spent and growth.
Resource Reallocation
Altman’s memo shifts focus to ChatGPT improvements like speed, reliability, personalization, and broader question handling. OpenAI pauses other work:
- Ads for ChatGPT
- AI agents for health and shopping
- Personal assistant called Pulse
Nick Turley, head of ChatGPT, posted on X that new rivals push OpenAI to raise the bar. Mint adds that GPT-5.2, originally due later in December, might drop as soon as December 9—though server issues or more rival news could delay it. An internal eval already showed OpenAI’s next reasoning model beating Gemini 3.
Liability and Financial Strain
Besides competition, OpenAI hit a data breach exposing ChatGPT users’ personal details, right as an investment report questioned profitability before 2030. Lawyers denied claims that ChatGPT acted as a “suicide coach” for a teen who died this year.
HSBC forecasts need 3 billion ChatGPT users by 2030 at 10% premium subscriptions for big revenue—tough if rivals keep winning. Google CEO Sundar Pichai flagged “irrationality” in AI investments, and the Bank of England warned of dotcom-like valuations.
OpenAI bets big: $1.4 trillion in infrastructure deals and on track for $20 billion revenue run rate this year. Altman eyes a mystery hardware device with Jony Ive that could ship 100 million units fast next year.
