OpenAI Chief Executive Sam Altman told employees Monday he was declaring a “code red” to marshal more resources toward improving ChatGPT, while delaying other initiatives including advertising efforts, as intensifying competition from Google and other artificial intelligence rivals threatens the company’s dominance, according to an internal memo reported by The Information.
The directive comes as Google’s Gemini 3 model, released in mid-November, has surpassed ChatGPT on multiple industry benchmarks and gained ground in market share. Gemini 3 achieved a breakthrough score of 1,501 on LMArena’s leaderboard, becoming the first model to exceed the 1,500 threshold, and Gemini 3 Deep Think scored 45.1% on the challenging ARC-AGI-2 reasoning test compared to GPT-5.1’s 17.6%.
Financial Pressures Mount
The shift in strategy reflects mounting financial pressures at OpenAI, which generated approximately $4.3 billion in revenue during the first half of 2025 but reported a net loss of $13.5 billion during the same period. The company faces over $1.4 trillion in procurement commitments over eight years, while its partners have taken on $96 billion in debt to provide the computing infrastructure OpenAI requires.
Despite the financial challenges, ChatGPT maintains a commanding market position with approximately 800 million weekly active users as of September 2025, representing roughly 75% of the generative AI chatbot market. However, recent data from analytics firm Similarweb indicates users now spend more time on Gemini than ChatGPT.
Advertising Plans Postponed
While OpenAI has not publicly confirmed advertising plans, The Information reported the company was testing various ad formats, including those related to online shopping. Code references discovered in the latest ChatGPT Android beta version revealed strings labeled “ads feature,” “search ad,” and “search ads carousel,” suggesting the company was preparing to introduce advertisements.
The company recently launched a shopping research feature in ChatGPT and partnered with retailers including Walmart and Target to enable direct purchases through the platform. These e-commerce initiatives, along with advertising efforts, now face delays as OpenAI refocuses on core product improvements.