In a dramatic pivot that echoes the AI industry's own origin story, OpenAI CEO Sam Altman has issued an internal "code red" directive, urging employees to halt non-essential projects and laser-focus on revitalizing ChatGPT. The move, detailed in a leaked memo first reported by The Information and The Wall Street Journal, comes just weeks after Google's unveiling of Gemini 3, a model that's not only topping benchmarks but also eroding OpenAI's once-unassailable lead in the generative AI race.

by Kasun Illankoon, Editor-in-Chief at Tech Revolt

This internal scramble signals a high-stakes battle for dominance, with profound implications for how AI assistants evolve—and monetize—in an increasingly crowded market.The memo, circulated on December 2, paints a picture of urgency Altman described as a "critical time for ChatGPT." He called for daily check-ins among development teams, temporary reassignments of engineers, and a ruthless prioritization of core enhancements: faster response times, greater reliability, deeper personalization, and the ability to tackle a broader swath of queries.

"We are at a critical time for ChatGPT," Altman wrote, acknowledging "temporary economic headwinds" from competitors like Google and Anthropic. To underscore the shift, OpenAI is shelving several ambitious initiatives, including AI agents for health and shopping, a personal assistant dubbed "Pulse," and—most notably—plans to weave advertising into its flagship chatbot.

This ad delay is particularly telling. OpenAI has flirted with commercialization for months. In October, Altman publicly stated there were "no current plans" for ads, yet internal testing revealed code snippets in the ChatGPT Android app hinting at shopping-linked promotions.

Independent sleuthing by engineer Tibor Blaho on X (formerly Twitter) uncovered references to ad integrations, fueling speculation of an imminent rollout. Now, with revenue pressures mounting—OpenAI reportedly burns through billions on compute and talent—the pause feels like a bet-the-company wager on product superiority over premature monetization.

At the heart of this turmoil is Gemini 3, Google's November 18 powerhouse that's rewriting the AI playbook. Launched with fanfare as the "Gemini 3 era," the model's Pro variant debuted in preview, integrated seamlessly into Google products like Search, Workspace, and the Gemini app.

It's not just hype: Independent benchmarks crown it a leader. On the LMSYS Arena leaderboard, Gemini 3 Pro boasts a 1501 Elo score, edging out rivals like OpenAI's GPT-5.1 and Anthropic's Claude Sonnet 4.5.

It aces Humanity's Last Exam—a PhD-level reasoning gauntlet—at 37.5% without tools, surging to 41% in "Deep Think" mode, a 50% leap over Gemini 2.5 Pro in solved tasks.

Multimodality is another flex. Gemini 3 handles long-form video, charts, and mixed-media documents with Video MMMU scores in the high 80s and MMMU Pro in the low 80s—areas where ChatGPT has lagged.

Its 1 million-token context window dwarfs competitors, enabling agentic workflows like "Google Antigravity," a developer platform that orchestrates AI agents for coding marathons.

Early adopters rave: Cursor's co-founder noted "even stronger performance in reasoning and problem-solving," while Figma praised its code-backed prototypes. User sentiment amplifies the threat. Salesforce CEO Marc Benioff tweeted, "I’ve used ChatGPT every day for 3 years. Just spent 2 hours on Gemini 3. I’m not going back. The leap is insane—reasoning, speed, images, video… everything is sharper and faster."

Gemini's user base exploded to 200 million in three months, chipping at ChatGPT's 800 million weekly actives (mostly free-tier). Market share tells the tale: OpenAI holds 70%, but Google's slice hit 15% for the first time, per SimilarWeb. The irony is poetic. Three years ago, ChatGPT's debut triggered Google's own "code red," spurring a $100 billion AI infrastructure binge.

Now, Alphabet's vertically integrated empire—custom TPUs, vast data troves, and free distribution via Search—has flipped the script. "Google can afford to offer advanced models free while OpenAI desperately needs to monetize," notes The Times of India.

OpenAI's costs spiral: Data centers gobble cash, talent poaching bids up salaries, and training delays compound the pain.

What does this mean for the AI ecosystem?

First, product trumps profit—for now. Delaying ads preserves ChatGPT's "pure" appeal, avoiding the "unsettling" dystopia Altman once decried. But it risks financial strain; subscriptions like ChatGPT Plus and enterprise deals sustain the beast, yet growth stalls without fresh revenue.

Second, the race accelerates. OpenAI teases a superior reasoning model next week, but Gemini's momentum—bolstered by enterprise integrations on Vertex AI—could lock in Google's edge. Analysts predict a "fragmented" search landscape, with AI assistants siphoning 10% of queries already.

For users, it's a boon: Stiffer competition yields smarter tools. ChatGPT's refinements could close the gap, while Gemini's multimodality redefines creativity and productivity. Yet, broader questions loom—about safety, as Gemini 3 undergoes rigorous "Deep Think" evaluations, and ethics, with ads looming as the next frontier. Altman ended his memo optimistically: "I wouldn't trade positions with any other company.

Nick Turley, ChatGPT's head, echoed on X: "Our focus now is to keep making ChatGPT more capable... while making it feel even more intuitive and personal."

As the dust settles, one thing's clear: The AI arms race isn't slowing—it's sprinting toward an uncertain, exhilarating horizon.