Why OpenAI is scrambling — and what it means for the AI race

When Sam Altman issued a “code red” at OpenAI at the start of December 2025, it marked a turning point. The directive came after Google’s latest AI model, Gemini 3, sharply undercut expectations and threatened OpenAI’s dominance.

Surge of Gemini 3

Gemini 3 did more than just generate hype, it outshone existing models on key technical benchmarks. That performance pushed Altman and his team to react with urgency. The model reportedly gained momentum in usage and delivered results that made users and enterprises pause and reconsider.

The timing and speed of Gemini 3’s rise seemed to catch many off guard. Its launch underscored how fast the AI race is evolving, with companies willing to invest heavily in infrastructure and innovation to get ahead.

What “Code Red” Actually Changes

Altman’s memo instructed teams to halt or pause several planned initiatives so they could focus on improving the core of ChatGPT, user-facing speed, reliability, and quality. Projects such as advertising integration, new shopping/health agents, and even a personal assistant called “Pulse” were put on hold.

In practical terms this means OpenAI is betting everything on making its flagship product better, rather than expanding horizontally right now. It reflects serious concern that the lead ChatGPT once had may be eroding.

High Stakes: Usage, Money and Market Confidence

Despite having roughly 800 million users weekly, OpenAI faces growing pressure. The competition is no longer theoretical, Gemini 3’s performance and adoption suggest a real shift in user and enterprise preference.

Long term, this scramble affects more than just product features. OpenAI is investing heavily in data-centres and computing power. If it cannot demonstrate renewed growth and superiority, the financial strain and market uncertainty could get worse.

What This Means for Users, Developers and Enterprises

• Users might see fewer “new” features soon, but better performance and reliability from ChatGPT.
  
  
• Developers and companies integrating AI services may re-evaluate tools depending on which model currently delivers better results.
  
  
• The broader AI landscape is accelerating. The dominance of a few major players is being challenged more frequently.

Looking Ahead

OpenAI’s “code red” is a bold move. It shows the company’s willingness to pause expansion and refocus on fundamentals when competition threatens. Whether this leads to a rebound or a longer struggle depends on how fast and effectively they can evolve ChatGPT to meet or exceed what Gemini 3 offers, and how the rest of the AI ecosystem adapts.