Will OpenAI Be the First AI Unicorn to Collapse?

The battle in AI is a battle of ecosystems.

On November 20, just two days after the launch of Gemini 3, OpenAI was voted the "second most likely AI unicorn to collapse" at the Cerebral Valley AI Summit, often referred to as the "Silicon Valley Investor Gala."

The same day, Sam Altman sent an internal memo acknowledging that OpenAI had fallen behind Alphabet in pre-training performance.

Ten days later, on December 1, Altman issued another company-wide internal letter—this time with a more urgent tone—declaring a "red alert" to halt all advertising commercialization and AI agent experiments, redirecting all efforts toward improving ChatGPT's performance. Silicon Valley investor Deedy Das commented on X that ChatGPT's daily visits had dropped by approximately 12 million in the 15 days since Gemini 3's launch, which he identified as the real reason behind OpenAI's red alert.

As Alphabet intensifies its pursuit, users and investors are beginning to realize that the AI competition is not just about user data or rapid commercialization—it’s a long-term battle for ecosystem dominance.

**ChatGPT Loses 10 Million Users to Alphabet**

On the 16th day after Gemini 3's release, rumors emerged that OpenAI was preparing to counterattack with a new large language model (LLM).

According to a recent report, OpenAI appears to have lagged behind Alphabet in the recent AI development race and is now attempting to fight back with a new model codenamed "Garlic."

OpenAI’s Chief Research Officer, Mark Chen, reportedly mentioned this new model to colleagues, noting its superior performance in internal evaluations—particularly in programming and reasoning tasks—compared to Gemini 3 and Anthropic’s Opus 4.5.

In fact, just two days after Gemini 3’s launch, Altman had already sent an internal memo summarizing Alphabet’s strength and OpenAI’s narrowing lead. He acknowledged that Alphabet had "done exceptionally well recently," especially in pre-training.

Pre-training is the first phase in developing LLMs capable of generating text or images, where models learn from vast datasets. Alphabet’s success in this area surprised many AI researchers, as OpenAI has struggled with pre-training challenges—a problem Alphabet itself once faced. These difficulties led OpenAI to focus more on reasoning models, which use additional processing power to generate better answers.

Before OpenAI’s summer release of GPT-5, employees discovered that adjustments made during pre-training worked for smaller models but failed as models scaled up. This suggested OpenAI needed to resolve these issues to catch up with Alphabet.

By October, Altman had proposed launching a model called "Shallotpeat" to counter Gemini 3 and fix pre-training bugs. The upcoming "Garlic" model is distinct, incorporating fixes developed during "Shallotpeat’s" pre-training phase. Reports indicate OpenAI aims to release a version of "Garlic" soon, possibly leading to GPT-5.2 or GPT-5.5 by early next year.

Deedy Das later shared traffic data on X, showing ChatGPT’s daily visits plummeting by 6% (from 203 million to 191 million) between November 11 and December 1. He wrote, "This is the real reason for ChatGPT’s red alert." The data underscores the brutal reality of competition and explains OpenAI’s aggressive resource reallocation—hesitation now could mean irreversible decline.

**Red Alert**

A day before news of the "Garlic" model leaked, a second internal letter from OpenAI surfaced, revealing unprecedented pressure.

In the letter, signed by CEO Sam Altman, he declared a "red alert" state, stating that ChatGPT was at a critical juncture for its future. Unlike the earlier memo, which merely acknowledged Alphabet’s technical prowess, this one framed Gemini 3 as an imminent threat, prompting drastic strategic shifts: pausing all non-core initiatives to focus entirely on optimizing ChatGPT’s core experience.

Projects delayed or shelved included early-stage advertising efforts—despite lacking a mature ad system, OpenAI had recently introduced shopping search and instant payment features. On November 24, it rolled out shopping search, allowing users to input product needs and budgets to receive tailored recommendations—a feature still active today. Additionally, AI agent projects (e.g., automated shopping comparisons, health reminders) and the "Pulse" personalized morning briefing tool were paused.

Altman outlined ChatGPT’s new priorities: 1. **Personalization**: Enhancing interaction quality for ~800 million weekly active users, enabling customization of AI responses. 2. **Image Generation**: Catching up to Alphabet’s Nano Banana Pro model, particularly in high-demand areas like interior design and photo-to-animation. 3. **User Preference Performance**: Ensuring OpenAI models outperform rivals in third-party evaluations (e.g., LMArena). 4. **Core Performance**: Boosting speed, stability, and reducing "over-refusal"—where AI rejects reasonable queries, a growing user complaint.

**User Experience: Gemini’s Edge** A power user noted Gemini’s superior Chinese comprehension and vibe coding (e.g., generating CSS/HTML from vague descriptions). Its Nano Banana image model also excelled in tasks like converting photos to Studio Ghibli-style animations—outpacing GPT-4o’s rigid outputs.

Gemini’s ecosystem integration—pulling YouTube timestamps or summarizing web searches—creates seamless workflows, while OpenAI’s plugin system feels disjointed. Many developers note Gemini’s lead in multilingual and multimodal tasks, with ChatGPT often overly cautious.

**The Ecosystem War** The competition has shifted from technical specs to ecosystem integration. Gemini’s fluency stems from Alphabet’s vast digital ecosystem (YouTube, Search, Gmail, Android), embedding AI into daily life. OpenAI, despite its developer community strength, lacks native ecosystem support, making ChatGPT feel powerful but fragmented.

In China, Gemini’s local data and cultural training give it an edge, while OpenAI struggles with regional nuances. User feedback suggests ChatGPT hasn’t worsened—Gemini just fits better into routines.

**Outlook** OpenAI retains strengths in foundational models, open-source tools (Triton, MLX), and enterprise APIs. Its Microsoft partnership (Copilot in Windows/Office/Azure) offers another ecosystem path, but one more enterprise-focused than Alphabet’s consumer reach.

The 6% traffic drop may be an early warning. If users adopt Gemini as their default, reclaiming mindshare will be tough. Future winners will embed AI into life’s fabric—not just spotlight it.

While OpenAI could rebound with "Garlic" and deeper platform integrations, the race is clear: ecosystem depth will decide dominance. ChatGPT may remain a niche tool (e.g., coding, English writing), but daily AI interactions could tilt toward more integrated rivals.

The competition is far from over, but the direction is set—the victor will be whoever hides AI in life’s seams, not just showcases it.