OpenAI CEO Sam Altman has declared a "code red" internal emergency, shifting the company's focus entirely to improving its flagship ChatGPT platform. In a memo seen by The Wall Street Journal, Altman warned staff that competing projects are being delayed to prioritize fixes for ChatGPT, including better personalization, faster speeds, and more reliable performance.
The move comes as OpenAI faces intense pressure from rivals like Google and Anthropic. Google's Gemini AI model recently outperformed OpenAI on industry benchmarks, leading to a stock surge, and has seen monthly active users grow from 450 million in July to 650 million by October after launching its 'Nano Banana' image generator. Anthropic is also gaining traction with business customers.
Altman's memo revealed that advertising initiatives, which were being quietly tested for online shopping promotions, are now postponed. Other delayed projects include AI tools for health and shopping, and a personal assistant called Pulse. OpenAI is encouraging temporary team shifts and holding daily calls to accelerate ChatGPT improvements.
Financially, OpenAI is not yet profitable and relies on funding to sustain operations, with a goal to reach $200 billion in revenue by 2030 for profitability. Despite over 800 million weekly users, the company struggles with balancing safety and usability, as seen with user complaints about GPT-5's robotic tone and errors in basic tasks. A November update aimed to address these issues.
The "code red" follows a previous "code orange" alert, part of OpenAI's three-tier system for issue severity. Altman claims an upcoming reasoning model will surpass Google's latest Gemini, but the company's heavy data center investments and investor nervousness add to the challenges.
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