Yes, this is a breaking development in the AI race, reported prominently by The Wall Street Journal on December 2, 2025. OpenAI CEO Sam Altman issued an internal memo declaring a company-wide "code red" to rally employees around improving ChatGPT, as Google's latest AI model, Gemini 3 (launched in early November 2025), has begun outperforming OpenAI's flagship product on key benchmarks like speed, reliability, personalization, and handling diverse queries. This marks a stark reversal: Just three years ago, ChatGPT's debut prompted Google to declare its own "code red" to accelerate AI efforts.Key Details from the Memo and ReportsFocus Shift: Altman instructed staff to prioritize ChatGPT's "day-to-day experience," delaying other initiatives like:Integrating ads into ChatGPT (a potential revenue stream OpenAI hasn't yet pursued).
Developing AI agents for shopping and health.
Launching "Pulse," a personal AI assistant.

Why Now?: Gemini 3's integration across Google's ecosystem (Search, Android, Workspace) has boosted user engagement and market share. High-profile figures like Salesforce CEO Marc Benioff have publicly switched from ChatGPT to Gemini, citing its superior performance. OpenAI, burning through billions in compute costs, needs to hit $200 billion in annual revenue by 2030 to break even— a tall order as rivals like Google (with $120 billion+ in yearly revenue) scale faster.
Broader Context: OpenAI's lead, once unchallenged, is eroding. Competitors including Anthropic are also closing in, and Microsoft's $13 billion+ investment in OpenAI hasn't yet yielded profitability, leading to recent quarterly losses.