As Google’s Gemini 3 surges, OpenAI delays aggressive expansion plans to double down on the speed, reliability, and survival of its flagship chatbot.
- The Strategic Pivot: CEO Sam Altman has issued an internal “code red,” halting the development of new AI agents and the “Pulse” assistant to focus entirely on improving ChatGPT’s core performance.
- Rising Stakes: Despite boasting 800 million weekly users, OpenAI faces immense pressure from Google’s recently released Gemini 3 and mounting investor concerns over a potential “AI bubble.”
- The Financial Reality: With over $1 trillion in financial obligations to chipmakers and cloud providers, the unprofitable $500 billion startup is racing to secure its dominance in the search and browser markets.
Three years ago this week, OpenAI unleashed ChatGPT, sparking a global technological revolution and securing an early, commanding lead in generative AI. However, the mood at the San Francisco-based startup is far from celebratory. Instead of a victory lap, CEO Sam Altman has declared a “code red,” signaling a dramatic shift in strategy as the company faces its most precarious moment yet.
The Memo: Back to Basics
According to internal communications reported by The Wall Street Journal and The Information, Altman sent a memo to staff on Monday outlining an urgent directive: drop the distractions and fix the flagship. The company is reportedly delaying several high-profile initiatives—including the development of advertising models, AI agents designed for health and shopping, and a new personal assistant codenamed “Pulse.”
The resources freed up by these delays are being marshaled toward one singular goal: enhancing ChatGPT. Altman emphasized that more work is needed to improve the chatbot’s speed, reliability, and behavioral models. The directive suggests that while OpenAI has been busy expanding its ecosystem, the core product that put it on the map may have become vulnerable.
The Google Threat and the Search War
The timing of this “code red” is no coincidence. Last month, tech giant Google unleashed Gemini 3, the latest iteration of its AI assistant, which has been praised for its capabilities and deep integration into the Google ecosystem. The competition has eroded OpenAI’s comfort zone, forcing them to defend their territory.
Nick Turley, OpenAI’s Vice President and head of ChatGPT, highlighted the new battlefield on social media Monday. He noted that online search is now one of the product’s biggest areas of opportunity. The goal is to make ChatGPT “even more intuitive and personal,” transforming it from a chatbot into a comprehensive information engine.
This strategy aligns with OpenAI’s recent aggressive moves in the browser market. In October, the company introduced “Atlas,” its own web browser designed to compete directly with Google Chrome. As more internet users turn to AI rather than traditional search bars to answer their questions, OpenAI is attempting to intercept those users before they reach Google.
The Trillion-Dollar Gamble
Beyond the technical rivalry, there is a massive financial engine driving this urgency. OpenAI is currently valued at a staggering $500 billion, yet it remains unprofitable. The company has committed more than $1 trillion in financial obligations to cloud computing providers and chipmakers—such as Nvidia and Oracle—required to power its massive AI systems.
This disparity between valuation and actual profit has amplified investor anxiety regarding an impending “AI bubble.” Unlike Google, which generates massive profits from search advertising, OpenAI currently relies primarily on premium subscriptions, as the vast majority of its 800 million weekly users utilize the free version.
While the “code red” memo indicates a delay in building an advertising business, the pressure is on. If OpenAI cannot maintain its technological superiority and eventually monetize its massive user base effectively, it risks failing to fulfill the sky-high expectations of its backers. Altman’s gamble is clear: pause the expansion, perfect the product, and ensure that when the dust settles, ChatGPT remains the king of the AI hill.