OpenAI declares ‘Code Red’ as Google’s Gemini AI outpaces ChatGPT in industry benchmarks, report claims — Sam Altman sets all hands to the pump on flagship LLM, parks other projects

OpenAI chief Sam Altman said in an internal memo that the company is in a “Code Red” status, meaning all other projects will take the backseat in favor of ChatGPT. According to The Wall Street Journal, Altman said in the memo that the company needed to improve its flagship AI LLM’s personalization, speed, and reliability, as well as allowing it to cover a wider range of topics.

OpenAI popularized the LLM with the release of ChatGPT on December 1, 2022, almost exactly three years ago. However, its competitors have since caught up with their own releases. Its current biggest threat is Google, which just released Gemini 3 in early November, and is baked into most, if not all, of Google’s products. Aside from this, Anthropic has also released Claude Opus 4.5 late last month, which is gaining market share among enterprise and business users. There are also several other challengers, like Meta’s open-source LLaMA and China’s DeepSeek.

This tightening competition has made it more crucial for OpenAI to stay ahead of the curve, especially as it continues to burn through capital. Microsoft, which has invested over $13 billion in the startup and holds around 27% of its for-profit OpenAI PBC, reportedly lost $3.1 billion on the AI company in its fiscal first-quarter earnings released in late October. Redmond previously hid its losses on OpenAI as part of its $4.7 billion “other” expenses.

Despite not turning a profit since its founding more than 10 years ago, OpenAI has been continuously spending and investing billions of dollars on massive data centers, with its president envisioning a 10-billion-GPU future. It even signed a deal with AMD in early October to secure 6 gigawatts in chips in exchange for 10% of AMD shares. All this talk of billions of dollars has led some experts to ask how it will make good on these investments.

Even though OpenAI’s rivals have taken strides in advancing their own LLMs, it still leads in several aspects. In fact, the company is expected to drop a new model next week that will challenge Gemini’s latest release. However, the WSJ reports that the response to its last major release in August 2025, GPT-5, was less than stellar, with users complaining that it felt clinical and was less capable in math and geography versus previous versions. OpenAI updated the model around three months later to fix these issues.

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