Code Red At OpenAI: ChatGPT Improvements Coming Soon After Gemini 3 Scare

A discovery in the ChatGPT Android app's beta version a few days ago suggested that OpenAI would soon display ads on ChatGPT's free tier. Soon after, The Wall Street Journal and The Information reported that OpenAI CEO Sam Altman issued a "code red" memo on Monday to employees, for an effort to deliver improvements to the ChatGPT models in response to Google's recently released Gemini 3, which outscored OpenAI's AI models in various key benchmarks. The code red call to action is a direct response to a threat to OpenAI's revenue streams. The company has more than 800 million monthly users, but most of them are on the free tier. Gemini's user base has risen significantly in the past few months, from 450 million in July to 650 million in October.

The Nano Banana image generator is seen as a catalyst, having been released in August. Google rolled out Gemini 3 Pro last month, followed by an improved Nano Banana Pro image generator. Anthropic has also released Claude Opus 4.5, which rivals Gemini 3 and GPT-5. Thus, OpenAI risks losing users, including paid subscribers, to its biggest rivals. Moreover, OpenAI isn't profitable. It has to keep raising money to run its business and build more data centers. The AI firm will have to grow its revenue to $200 billion in 2030 to turn a profit.

The Journal notes that OpenAI uses different color codes to describe the urgency of certain issues: yellow, orange, and red. Previously, OpenAI called a "code orange" for improving ChatGPT. Altman's memo now raises the alarm level to "code red." Interestingly, Google declared its own code red three years ago, soon after ChatGPT went viral. Google has been improving its AI services ever since. Altman detailed some of the expected improvements for ChatGPT in the memo. The chatbot should offer better personalization features, speed, and reliability. The AI should also be able to answer a wider range of questions. The CEO noted that a new reasoning model will be released next week.

The new ChatGPT model should outperform Gemini 3. The Information mentioned other OpenAI priorities for the near future, including upgrades to its image generation models. Both reports said that ChatGPT ads, AI agents for shopping and healthcare, and ChatGPT Pulse improvements will see delays as a result. While Altman's memo hasn't leaked in full, OpenAI's head of ChatGPT, Nick Turley, took to X on Monday to briefly recap ChatGPT's three-year history and detail plans for the near future. The OpenAI executive said that the company's focus is to "keep making ChatGPT more capable, continue growing, and expand access around the world — while making it feel even more intuitive and personal."