OpenAI, the San Francisco-based startup behind the popular chatbot ChatGPT, is currently navigating a period of intense competition, prompting its chief executive, Sam Altman, to declare a "code red" within the company. In an internal memo, Altman emphasized the "critical time for ChatGPT," signaling a heightened focus on improving the product amidst a rapidly evolving artificial intelligence landscape.

The urgency within OpenAI is largely attributed to the remarkable success of Google's latest AI model, Gemini 3. This rival model has reportedly outperformed competitors on various benchmarks, causing concern within OpenAI. Last month, Altman communicated to employees that the launch of Gemini 3 could create "temporary economic headwinds" for the company, anticipating a "rough" period.

Despite ChatGPT boasting an impressive 800 million weekly users, Google's established profitability from its search business provides it with a significant advantage, including substantial data and financial resources dedicated to its AI tools. This competitive pressure has led OpenAI to reallocate more internal resources towards enhancing ChatGPT's capabilities.

The perceived superiority of Gemini 3 has been publicly acknowledged by prominent figures, including Marc Benioff, CEO of Salesforce. Benioff, a long-time daily user of ChatGPT, announced his switch to Gemini 3, stating he was "not going back." He lauded Google's latest AI release for its "insane" leap in reasoning, speed, images, and video, describing the experience as "sharper and faster" and feeling like "the world just changed, again."

In response to these competitive pressures and its renewed focus, OpenAI is reportedly delaying its plans to introduce advertising into ChatGPT. The head of ChatGPT, Nick Turley, marked the chatbot's third anniversary by reaffirming the company's commitment. He posted on X, "Our focus now is to keep making ChatGPT more capable, continue growing, and expand access around the world – while making it even more intuitive and personal. Thanks for an incredible three years. Lots more to do!"

Financially, OpenAI operates without the deep cash flow enjoyed by rivals like Google, Meta, and Amazon (which funds Anthropic). However, it has secured substantial funding from major investors such as Microsoft and the SoftBank investment group. Its latest valuation soared to $500 billion, a significant increase from $157 billion just last October. Despite being currently loss-making, OpenAI projects annual revenues to exceed $20 billion, with Altman optimistically predicting growth to "hundreds of billion[s]" by 2030.

This ambitious revenue growth is underpinned by an enormous financial commitment to infrastructure. OpenAI has pledged to spend an astonishing $1.4 trillion on datacentre costs over the next eight years to train and operate its advanced AI systems. Altman justified this immense investment last month, stating, "Based on the trends we are seeing of how people is using AI and how much of it they would like to use, we believe the risk of OpenAI of not having enough computing power is more significant and more likely than the risk of having too much."

The broader technology sector is also feeling the intense competitive heat in AI. Apple, notably, has responded by appointing a new vice-president of AI, Amar Subramanya, who joins from Microsoft, replacing John Giannandrea. Subramanya's extensive experience includes serving as corporate vice-president of AI at Microsoft and spending 16 years at Google, where he was involved in the engineering leadership for the Gemini assistant. Apple has been perceived as slower than competitors like Samsung in integrating AI features into its products, with AI improvements to its voice assistant Siri reportedly delayed until 2026, highlighting the industry-wide race for AI dominance.