The tables have turned in artificial intelligence’s most consequential rivalry. Sam Altman, CEO of OpenAI, issued an internal “Code Red” memo on December 1, mobilizing resources to strengthen ChatGPT amid mounting competitive pressure from Google’s resurgent AI efforts. The emergency declaration marks a stunning reversal from 2022, when ChatGPT’s explosive debut forced Google to sound similar alarms.
ChatGPT Stumbles While Google Accelerates
According to the memo, obtained by multiple sources, Altman characterized the moment as critical for ChatGPT’s future. The urgency stems from Google’s aggressive rollout of its Gemini 3 model, which has been deployed across the company’s vast ecosystem reaching billions of users through products like Google Search. What once seemed like OpenAI’s unassailable lead in consumer AI is now under serious threat.
OpenAI’s recent performance reveals troubling signs for the company that launched the generative AI revolution. The company’s last major release, GPT-5 in August 2025, landed with a thud. Users complained the model felt overly clinical in its responses and showed surprising weaknesses in mathematical reasoning and geographical knowledge compared to earlier versions. OpenAI needed approximately three months to issue updates addressing these concerns, a delay that allowed competitors to close the gap.
Meanwhile, user growth metrics tell a stark story of shifting momentum. Between August and November 2025, ChatGPT’s global monthly active users grew by just 6%, reaching approximately 810 million. That’s respectable growth in absolute terms but represents a dramatic slowdown for a product that once added users at breakneck speed.
Google Gemini, by contrast, saw monthly active users surge roughly 30% during the same period. The launch of the Nano Banana image generation model contributed to increased adoption, giving users new creative capabilities that ChatGPT couldn’t match. By October, Gemini had reached 650 million monthly users, closing what was once a massive gap.
Market Share Erosion Across Multiple Fronts
The competitive dynamics look even worse for OpenAI when examining market share trends. Over the seven months from May through November 2025, Gemini increased its share of global monthly active users by three percentage points. ChatGPT, meanwhile, surrendered three percentage points of market share just in the four-month period from August through November.
The enterprise market tells an even more concerning story for OpenAI. According to a recent Menlo Ventures report analyzing corporate AI adoption, OpenAI has fallen to 27% share among enterprise customers. Google Gemini captured 21%, but the real surprise came from Anthropic, which claimed the leading position with 40% of the enterprise market.
That last figure particularly stings for OpenAI. Anthropic was founded by former OpenAI researchers who departed over disagreements about the company’s direction. Now their startup has leapfrogged OpenAI in the lucrative enterprise segment, where customers pay premium prices for AI capabilities and tend to stick with chosen vendors.
Gemini 3’s Technical Superiority
Google’s Gemini 3 model appears to have achieved genuine technical advantages that translate into better user experiences. The model posted strong benchmark results across multimodal reasoning, mathematics, and coding tasks, precisely the areas where GPT-5 disappointed users.
High-profile endorsements have amplified Gemini 3’s momentum. Salesforce CEO Marc Benioff, after testing the model, declared on social media that he wouldn’t be returning to competitors. He described Gemini 3’s improvements in reasoning, processing speed, and handling of images and video as “insane,” representing a generational leap forward.
Such testimonials from influential technology executives carry weight. They signal to other enterprise decision-makers that Google has closed or even reversed the quality gap that once favored OpenAI.
Google’s Structural Advantages
Beyond model quality, Google possesses distribution advantages that OpenAI cannot easily replicate. Before ChatGPT’s November 2022 launch, Google was widely considered the global leader in AI research. The company’s researchers invented the transformer architecture, described in the seminal paper “Attention Is All You Need,” which forms the foundation of every modern large language model, including those built by OpenAI.
More importantly, Google controls Android, the world’s dominant mobile operating system. Recent data shows that approximately twice as many U.S. Android users now interact with Gemini directly through operating system integration compared to those using the standalone Gemini mobile app. With Android’s overwhelming global market share, particularly in developing markets, this OS-level integration provides distribution that ChatGPT cannot match without similar partnerships.
Users opening their Android devices can access Gemini with a simple gesture or voice command, making it the default AI assistant for billions of people. ChatGPT requires downloading a separate app and creating an account, introducing friction that matters enormously at scale.
OpenAI’s Strategic Pullback
Altman’s memo revealed that OpenAI is postponing multiple initiatives that were expected to help the company approach breakeven by 2030. Plans for advertising revenue, an expanded e-commerce offering, and certain agentic AI systems have been delayed, though the memo didn’t specify for how long.
This strategic retreat suggests OpenAI needs to concentrate resources on its core product rather than pursuing multiple revenue streams simultaneously. The company raised billions in funding at a valuation exceeding $150 billion, creating enormous pressure to demonstrate sustainable economics. Delaying revenue initiatives to shore up ChatGPT’s competitive position represents a significant shift in priorities.
The memo did strike one optimistic note. Altman stated that OpenAI would release a new reasoning model next week that outperforms Gemini 3 in internal evaluations. However, he acknowledged the need for major improvements to the overall ChatGPT experience beyond raw model performance.
The Rapid Reversal
These developments underscore how quickly leadership can shift in the AI market. In late 2022, ChatGPT’s viral success caught Google flatfooted, forcing the search giant to declare its own “Code Red” and accelerate AI integration across its products. The company faced existential questions about whether conversational AI would disrupt its core search business.
Now, just over two years later, the roles have reversed. Google has leveraged its vast resources, research expertise, and distribution advantages to mount a serious challenge to OpenAI’s position. The company that invented many of the technologies powering the AI revolution has reasserted itself as a formidable competitor.
For OpenAI, the pressure intensifies. The company must demonstrate that its early lead and brand recognition can withstand competition from a tech giant with deeper pockets, broader distribution, and comparable technical capabilities. The coming months will test whether OpenAI can execute on Altman’s emergency mobilization and whether its upcoming releases can recapture momentum.
The AI race, it turns out, is far from over. What seemed like OpenAI’s decisive victory just a year ago now looks more like the opening round of a prolonged battle. Google’s comeback serves as a reminder that in technology, early leads can evaporate quickly when well-resourced competitors find their footing.
