OpenAI Declares ‘Code Red’ as Altman Pauses ChatGPT Ad Rollout

OpenAI has reportedly declared a “code red” internally, with Sam Altman, CEO of OpenAI, calling for an immediate push to improve ChatGPT’s performance and day-to-day reliability. The development comes at a time when the company is facing rising competitive pressure from Google’s Gemini models, which have been steadily gaining market share in the generative AI ecosystem.

The decision surfaced through an internal memo quoted by The Information and The Wall Street Journal, suggesting a significant shift in OpenAI’s near-term priorities. The company, which earlier issued a “code orange” to enhance ChatGPT, categorises red as its highest-severity response.

What Triggered the ‘Code Red’ Moment

According to the memo, Altman told employees that OpenAI will redirect attention toward improving ChatGPT’s personalisation, speed, reliability, and ability to handle a wider range of user queries. As generative AI becomes deeply integrated across professional and personal workflows, friction in everyday use tends to impact user retention—an area competitors are now aggressively targeting.

The move signals a tactical pullback from non-core initiatives. Altman reportedly informed teams that several planned features and product launches are being delayed, including:

• Ads inside ChatGPT

• AI agents for health and shopping

• The personal research assistant, Pulse

Pulse, introduced just months earlier, was designed to give users a daily digest of updates based on interests and previous interactions. Altman had called it one of his favourite features of ChatGPT, but the company now appears focused on stabilising core experience before expanding into new categories.

Team reassignments are also expected. The memo notes that Altman encouraged temporary transfers to teams actively working on ChatGPT improvements and initiated daily check-ins for all responsible groups.

Inside the Push for a Better ChatGPT Experience

OpenAI’s internal shift aligns with growing user expectations. Models once seen as breakthroughs now compete against newer systems that prioritise multimodal capabilities, context depth, and image consistency.

In a public post on X, Nick Turley, Head of ChatGPT, OpenAI, highlighted OpenAI’s renewed commitment to product quality. 

He wrote, “Our focus now is to keep making ChatGPT more capable, continue growing, and expand access around the world while making it feel even more intuitive and personal. Thanks for an incredible three years. Lots more to do!”

The statement reinforces OpenAI’s direction: strengthening the chatbot’s core experience rather than pushing new revenue streams or experimental features.

Competition From Gemini Intensifies Market Pressure

While OpenAI still holds over 70 per cent of the generative AI market share, SimilarWeb data suggests a gradual decline in recent months. Google’s Gemini models, especially Gemini 3 Pro and the Nano Banana series, have been gaining traction.

Gemini’s Nano Banana model had a viral moment when users began editing images into consistent, multi-subject styles with minimal effort. Its successor, Nano Banana Pro, ranked high on image-editing benchmarks, while Gemini 3 Pro has been widely perceived as outperforming OpenAI’s comparable models.

This shift in consumer sentiment appears to have accelerated OpenAI’s urgency. In a category where user attention moves quickly, even marginal performance dips can influence market dynamics.

Why ‘Code Red’ Matters for OpenAI’s Broader Strategy

OpenAI’s move comes at a defining phase for generative AI companies. As the market matures, leadership will depend less on breakthrough launches and more on sustained improvements, reliability, and personalisation elements that directly impact daily usage.

For enterprises integrating AI into workflows, instability or slower responses add operational risk. For individual users, inconsistent experience triggers platform switching. And for developers building on APIs, reliability is non-negotiable.

OpenAI’s renewed internal push suggests it recognises this shift and is grounding its strategy in strengthening foundational capabilities before expanding into ads, health agents, or broader consumer experiences.

Entering Its Second Phase of Competition

The “code red” moment highlights a broader trend: generative AI is entering its second competitive cycle. The first cycle was model-driven. The next will be experience-driven.

Google, OpenAI, Anthropic, and others now compete not only on raw intelligence but also on:

• latency

• personalization

• multimodal consistency

• integration into daily workflows

• unit economics of running at scale

OpenAI’s current stance positions ChatGPT to evolve in that direction faster, more predictably, and more personally.