Faced with fierce competition from Google, OpenAI CEO Sam Altman can no longer sit still. After acknowledging the &#34;temporary economic headwinds,&#34; he announced the initiation of the highest level of &#34;Code Red&#34; within the company!
According to an internal memo obtained by The Information today, OpenAI CEO Sam Altman officially announced to all employees on Monday (December 1) that the company has entered &#34;Code Red&#34; status.
Altman bluntly stated in the memo: &#34;We are at a critical moment for ChatGPT.&#34;
In response to Google's strong counterattack with Gemini and signs of slowing growth, OpenAI has decided to urgently adjust its strategic direction: postponing new commercialization projects, including advertising and AI Agents, reallocating all core resources, and fully optimizing the user experience and performance of its flagship product, ChatGPT.
This move marks a shift in OpenAI's strategic focus from &#34;exploring diversified monetization&#34; back to &#34;core defense.&#34;
<h2>Strategic U-turn: Sacrificing short-term monetization to defend 800 million users</h2>
To address the crisis, Altman issued clear directives: Everything must make way for ChatGPT.
<ol>
<li>
Postponing advertising monetization: Although OpenAI has been testing shopping ads based on the search behavior of millions of ChatGPT users, this highly promising revenue source has been halted.
</li>
<li>
Slowing down new projects: The &#34;AI Agents&#34; project aimed at automating shopping and health tasks, as well as the development of the personalized morning report project &#34;Pulse,&#34; have both been delayed.
</li>
</ol>
During the &#34;Code Red&#34; period, OpenAI has established five core pain points that must be prioritized to consolidate its 800 million weekly active users. Specific goals include:
<blockquote>
<ul>
<li>
Personalization: Providing customized interaction methods for over 800 million weekly active users.
</li>
<li>
Image generation: Improving the Imagegen feature to compete with new products like Google's Nano Banana Pro. This feature allows users to create various images, from interior design to animating real photos.
</li>
<li>
Model behavior: Optimizing model performance to surpass competitors in public rankings like LMArena.
</li>
<li>
Speed and reliability: Enhancing the response speed and operational stability of ChatGPT.
</li>
<li>
Reducing over-refusals: Minimizing the phenomenon of the model excessively refusing to answer benign questions.
</li>
</ul>
</blockquote>
<h2>Trillion-dollar gamble: The key battle for the next round of financing</h2>
This &#34;Code Red&#34; is not only a product defense battle but also a battle for capital survival.
OpenAI expects to spend hundreds of billions of dollars on technology research and computing power reserves in the coming years. The company's current financial forecast indicates that ChatGPT's subscription revenue is approximately $10 billion this year, with plans to increase to $20 billion next year and reach $35 billion by 2027
However, to support this grand blueprint, OpenAI needs to raise approximately $100 billion in substantial funding. Altman is well aware that if they cannot effectively suppress Google's momentum at this stage and prove that ChatGPT remains the best AI product in the world, their subsequent financing capabilities will be significantly diminished.
<h2>New Model Coming Soon, Billion-Dollar Financing Prospects Awaiting Evaluation</h2>
Despite facing pressure, OpenAI is actively advancing technological iterations. Altman revealed that the company plans to release a new reasoning model next week. According to internal assessments, this model &#34;outperforms (Google's) Gemini 3&#34; in terms of performance. However, Altman also acknowledged that the company still has more work to do in improving the overall &#34;experience&#34; of ChatGPT.
The performance of this new model and the overall optimization results of ChatGPT will be key in determining OpenAI's future financing prospects. The company expects to spend hundreds of billions of dollars on technology research and product operations in the coming years, making its financing capabilities crucial. According to a forecast from this summer, despite the massive cash burn, the company expects ChatGPT's subscription revenue to reach $10 billion this year, increase to $20 billion next year, and reach approximately $35 billion by 2027. Whether they can maintain their lead in fierce competition will be central to validating the feasibility of this grand blueprint.
<h2>Intensifying Competition, Growth Concerns Emerge</h2>
The direct trigger for this &#34;red alert&#34; is the increasingly fierce market competition and concerns about growth potential. Three years ago, it was the emergence of ChatGPT that forced Google to initiate its own &#34;red alert&#34; in response to the threat to its search business. Now, the balance of power seems to be subtly shifting.
In October of this year, Google disclosed that its Gemini chatbot's monthly active users had increased from 450 million in July to 650 million. Additionally, Google has launched an &#34;AI mode&#34; in its search application, making its functionality closer to that of a chatbot. Although there is still a gap in total user numbers between Gemini and the ChatGPT data released by OpenAI, its momentum should not be underestimated. Meanwhile, AI models from companies like Anthropic have also received widespread acclaim from developers.
Against this backdrop, Altman has warned employees that Google's strong comeback could have economic repercussions for the company. Chief Financial Officer Sarah Friar has also mentioned the topic of slowing growth to investors, although she did not specify which growth metric was being referred to. For a company that requires continuous massive financing to sustain operations and research and development, any signs of slowing growth could pose a challenge to investor confidence

GOOGL

OpenAI

GOOG

In the face of the severe threat posed by the surge in users of Google Gemini and the technological lead, OpenAI announced the initiation of an internal "red alert." The company will delay new projects such as advertising business and AI agents, focusing all resources on optimizing the core experience of ChatGPT, including enhancing personalization, image generation capabilities, and response speed. This move aims to solidify the moat of over 800 million users and lay the groundwork for the next round of critical financing, estimated at around $100 billion

- OpenAI CEO Sam Altman announced a "Code Red" status due to intense competition from Google and signs of slowing growth.  
- The company is postponing new projects and reallocating resources to enhance the user experience of ChatGPT, aiming to protect its 800 million active users.  
- OpenAI plans to raise approximately $100 billion to support its ambitious growth targets, with a new model set to launch soon, which is crucial for its future financing prospects.

Activate the red alert! OpenAI suspends its advertising business and is fully committed to "fighting hard" against Google Gemini