OpenAI CEO Sam Altman announced a “code red” this week in an internal company email. The purpose of the move, which was revealed in The Information, is to concentrate resources and management layers around the immediate improvement of ChatGPT, and it comes against the background of increasing competition from Google and other artificial intelligence players.
According to the same internal memo sent to employees, Altman defined the current period as a “critical moment” for ChatGPT, the venture that ignited the AI revolution three years ago, and made it clear that other projects would be delayed to allow for a rapid “leap” in the system’s capabilities. The reason for the vigilance is mainly due to the approach of Google, which presented significant progress in the Gemini chatbot in the last year. Thus, according to Google data, Jimny currently has about 650 million monthly users, compared to 450 million in July.
While the numbers are still far from OpenAI’s historical usage figures, it’s a trend that worries the company’s management. According to The Information, also in internal conversations, Altman emphasized that Google’s strengthening could create “temporary economic headwinds” for OpenAI, especially at a time when the company was preparing for huge fundraisings with a cumulative volume that may reach 100 billion dollars in the coming years.
Altman’s statement comes at a sensitive time from a business perspective. On the one hand, ChatGPT has become a major revenue engine, which should generate around $10 billion this year and grow to $20 billion next year, alongside a forecast of $35 billion in 2027. On the other hand, the company burns huge sums on the development of new models, calculation infrastructures and the integration of multimodal capabilities. Any slowdown in the rate of user adoption could make it difficult for the rate of recruitment and the confidence of investors. In the background, CFO Sarah Perier also hinted at challenging growth data in an investor call, although she did not specify which index she was referring to.
Advertising model in ChatGPT on Hold
Along with the concern about the competition, OpenAI is also preparing to launch a new model, which should significantly improve ChatGPT’s deep thinking capabilities and create another quality gap with Google. Now, as part of the “Red Code”, employees will focus on strengthening the personalization capabilities of the chatbot for the more than 800 million active users per week, including personalizing the style and nature of the interaction. Another move concerns the upgrade of Imagegen – OpenAI’s image creation system, which is expected to receive new and more complex capabilities in the coming months.
At the same time, one of the more secretive aspects revealed in the memorandum concerns the delay in various programs that deal with monetization. OpenAI has not yet officially confirmed that it is testing an advertising model for ChatGPT, but according to a source cited in the reports, the company is conducting tests related to online shopping, in light of the fact that users are already turning to ChatGPT in order to locate products. The development of two additional products is also expected to be pushed back: “super-agents” (AI agents) that will perform complex operations for users in areas such as health and shopping, and Pulse – a service designed to produce personalized morning reports.
The code red turn
While OpenAI is pressing the pedal, Google is sharpening its strategy against ChatGPT and launching a new “AI mode” in the search engine, which allows users a chat-like interaction inside the classic search box. OpenAI states that despite the acceleration from its competitors, ChatGPT is still responsible for about 70% of the “digital assistants” activity in the world and about 10% of the search activity, data that indicate the strength of its chat dominance.
Broadly speaking, Altman’s announcement marks a fascinating turn: three years after ChatGPT forced Google to declare its own “code red” and speed up Jimny’s rollout, OpenAI now finds itself on the sidelines feeling threatened, with fierce competition likely to lead the two into an accelerated sequence of upgrades.
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