OpenAI is undergoing a major strategic pivot. CEO Sam Altman has reportedly issued an internal "code red," halting multiple side projects—including the Sora video generation initiative—for approximately eight weeks to focus entirely on improving ChatGPT. This decision underscores deeper ideological divisions within OpenAI between "pursuing broad consumer appeal" and "achieving breakthrough research goals." Altman believes ensuring OpenAI's survival now requires prioritizing user satisfaction over its original mission of developing artificial general intelligence (AGI).
**Shifting Priorities Amid Eroding Lead** Earlier this month, Altman declared a "code red" in an internal memo, redirecting resources to enhance ChatGPT’s capabilities amid intensifying competition. Projects temporarily shelved include a high-potential advertising business, an AI Agent for automating complex tasks like shopping and health management, and Pulse, a feature generating personalized daily reports.
OpenAI’s dominance in AI is fading. Google (GOOGL.US) recently launched Gemini 3, its "smartest" AI model yet, which outperformed ChatGPT in early benchmarks. Gemini 3 scored a record 1501 on the LMArena global leaderboard, achieved 37.5% on the Humanity’s Last Exam reasoning test (surpassing GPT-5 Pro’s 31.64%), and demonstrated doctoral-level performance in academic benchmarks like GPQA Diamond (91.9%) and MathArena Apex (23.4%).
Altman warned employees of "short-term economic pressure" from Google’s resurgence, while CFO Sarah Friar acknowledged slowing ChatGPT growth. Meanwhile, rival Anthropic secured a $350B "strategic partnership" with Microsoft (MSFT.US) and Nvidia (NVDA.US), threatening OpenAI’s compute advantage.
**User Growth Gap Narrows** Google claims Gemini has 650M monthly active users (MAUs), while ChatGPT boasts 800M weekly actives (per Altman’s October data). Though metrics differ, the trend is clear: competition is closing in. Analysts predict Google and Anthropic will further erode OpenAI’s lead.
Despite trailing in downloads—Gemini surged from 15M/month mid-2025 to 66M by October—ChatGPT retains a 90% share of mobile chatbot sessions (vs. Gemini’s 4%) and higher engagement (8 daily opens vs. 2.5). However, converting trial users into habitual ones remains OpenAI’s critical challenge.
**Doubling Down on ChatGPT** Altman’s memo prioritized leveraging user feedback to boost ChatGPT’s rankings and stickiness, despite past controversies over mental health risks from over-personalization. OpenAI has pledged collaboration with mental health experts to mitigate such risks while reviving popular GPT-4o features to counter Google.
**AGI on Hold, Commercial Realities Bite** Originally an AGI-focused research outfit, OpenAI now faces tension between idealism and profitability. Research head Jakub Patchocki advocates cutting-edge breakthroughs, while product VP Fidji Simo pushes ChatGPT optimizations. Altman’s "code red" tilts the balance toward commercialization.
Upcoming model GPT-5.2 (emphasizing code/business use) and a January release with enhanced visuals/speed aim to reclaim momentum. But paused side projects—including ads—delay revenue streams, exacerbating financial pressures.
**Financial Strain and "AI Bubble" Fears** OpenAI’s $13.5B H1 2025 net loss (up from $3.1B YoY) reflects crushing costs, with projected cloud/compute expenses hitting $792B by 2030. Despite $43B revenue (up 200% YoY), its 5% ChatGPT付费率 leaves profitability distant. HSBC warns cumulative free cash flow could remain negative through 2030, requiring $207B in funding.
With partners like SoftBank and Oracle (ORCL.US) shouldering nearly $1T in debt for OpenAI’s data centers, skepticism mounts. La Pietra Capital’s Olivier Khatib notes: "The core risk is the profit gap. If投入can’t cover costs, the bubble deflates."
For now, OpenAI bets everything on ChatGPT—survival hinges on winning today’s battle, leaving tomorrow’s AGI dreams for later.
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