OpenAI CEO Sam Altman sent an internal memo on Monday declaring a company-wide code red, rallying employees to accelerate development of a new artificial intelligence model codenamed Garlic and rush critical improvements to ChatGPT.
The dramatic shift in corporate strategy represents the first major defensive action by the ChatGPT maker since the service launched three years ago and fundamentally altered the artificial intelligence landscape.
Altman's memo signals that OpenAI recognizes the competitive threat posed by Google's Gemini 3, which surged to the top of industry benchmark leaderboards following its November 18 release.
The urgency behind Altman's code-red decision stems from concrete evidence that Gemini 3 is rapidly gaining market share at ChatGPT's expense.
Google's Gemini 3 grew its user base from 450 million monthly active users in July to 650 million in October, capturing 200 million new users within three months.
Meanwhile, data from SimilarWeb shows that ChatGPT lost approximately 6% of its daily active users in the two weeks following Gemini 3's launch, with active users dropping from 203 million to 191 million.
These metrics demonstrate that Google's latest model is successfully converting users away from the long-dominant ChatGPT platform.
Why OpenAI Declared Code Red Against Google
Altman's internal memo outlined a comprehensive strategic shift aimed at preserving OpenAI's market leadership and competitive position. The company is delaying planned initiatives in advertising, AI shopping assistants, and other growth-focused projects to reallocate resources toward strengthening ChatGPT's core performance capabilities.
In the memo, Altman wrote that the company had reached a critical juncture, stating clearly that the current moment represents a decisive point in ChatGPT's competitive trajectory.
This reallocation of resources from revenue-generating initiatives to competitive defense underscores the seriousness with which OpenAI leadership views the Gemini 3 threat.
The code red declaration mirrors a similar strategic emergency that Google CEO Sundar Pichai declared three years ago when ChatGPT's launch threatened Google's search dominance and core business model.
Now, roles have reversed, with OpenAI forced into a defensive posture after years of rapid growth and market expansion.
The parallel situations highlight how quickly artificial intelligence leadership can shift when breakthrough technologies emerge, and how even dominant players must respond aggressively to maintain their market position.
Did you know?
Gemini 3 excels at a new concept called "Vibe Coding," which allows developers to generate full, functional, and aesthetically rich front-end interfaces, games, or apps using only simple, high-level natural language prompts.
What Makes the Garlic Model a Game Changer
OpenAI Chief Research Officer Mark Chen reported to colleagues last week that the company's Garlic model is performing strongly in internal evaluations when measured against Google's Gemini 3 and Anthropic's Claude Opus 4.5, particularly in critical areas including coding and reasoning tasks.
According to people familiar with the project, Garlic could debut as GPT-5.2 or GPT-5.5 by early 2026, potentially positioning it as the company's next major model release.
Chen described Garlic as a breakthrough in pretraining efficiency, telling staff that the research team succeeded in infusing a smaller model architecture with the same amount of knowledge that previously required much larger computational resources.
The Garlic model builds upon lessons learned from Shallotpeat, an earlier internal project that Altman referenced when communicating with employees in October.
Shallotpeat was specifically designed to counter Gemini 3's capabilities and served as a foundation for understanding the technical approaches necessary to compete with Google's latest offering.
Altman's memo also indicated that OpenAI plans to release a new reasoning model within one week, with internal evaluations showing that it outperforms Gemini 3 on key benchmark tests.
The company is prioritizing rapid improvements to ChatGPT's personalization features, response speed, system reliability, and the ability to handle a broader range of user queries and use cases.
How Gemini 3 Shifted the Competitive Landscape
Google's Gemini 3 release triggered a significant recalibration of competitive dynamics across the entire artificial intelligence industry. The model's strong performance on industry benchmarks, combined with aggressive user acquisition, created a direct challenge to OpenAI's market dominance.
Anthropic responded to the competitive pressure by releasing Claude Opus 4.5 on November 24, explicitly claiming it as the world's best model for coding tasks and agentic workflows.
This competitive response from a second major AI company suggests that Gemini 3's capabilities have genuinely advanced the state of artificial intelligence in measurable ways.
The competitive shift extends beyond technical performance metrics to capture strategic business decisions from major corporate leaders.
Salesforce CEO Marc Benioff announced on Sunday that he would stop using ChatGPT after 3 years of adoption, publicly calling Gemini 3's capabilities "insane".
This high-profile switch by a major enterprise technology leader signals a broader shift in preferences among influential business decision makers. It suggests that switching costs from ChatGPT to competing platforms may be lower than previously assumed.
ALSO READ | UN Releases Report on AI's Impact on Global Economic Inequality
OpenAI's Strategic Pivot and Resource Reallocation
OpenAI's decision to delay advertising, shopping assistants, and other new product initiatives reflects a deliberate strategic choice to focus limited engineering resources on maintaining technological leadership in core AI capabilities.
This reallocation decision carries significant opportunity costs, as OpenAI had been pursuing multiple revenue diversification strategies beyond its core ChatGPT subscription service.
By shelving these initiatives, the company is essentially accepting near-term revenue growth limitations to focus on defending its market position and preventing further user attrition to competing platforms.
The code red strategy also highlights OpenAI's challenging competitive position relative to technology giants like Google, which controls critical infrastructure, including custom artificial intelligence chips, global data centers, and distribution channels reaching billions of devices worldwide.
OpenAI must compete while maintaining financial independence from major technology companies, though the company is pursuing a $500 billion valuation dependent on reaching $20 billion in annual recurring revenue.
This ambitious financial target reflects OpenAI's need to demonstrate sustainable business model viability while defending market share against better-capitalized competitors.
What This Means for the Future of AI Leadership
OpenAI's code red declaration signals that artificial intelligence market leadership remains contested and that technological advantages can shift rapidly as new breakthroughs emerge.
The competitive pressure from Google, Anthropic, and other companies suggests that the artificial intelligence industry is entering a new phase characterized by intense rivalry, rapid innovation cycles, and significant user migration between platforms.
Companies that fail to maintain technological leadership risk losing users and market share to competitors offering superior capabilities.
The intensity of current competition also suggests that artificial intelligence development will continue accelerating across multiple companies simultaneously, potentially benefiting end users through rapid capability improvements and increased innovation.
OpenAI's willingness to declare code red and reallocate resources demonstrates that the company retains the organizational flexibility and capital necessary to respond to competitive threats.
However, sustained competitive pressure from better-capitalized technology giants suggests that OpenAI's long-term success depends on demonstrating consistent technological advantages and maintaining user loyalty despite attractive alternatives from competitors.
Comments (0)
Please sign in to leave a comment