OpenAI in “code red” after losing 6% of its users in a week due to Gemini 3, report says
In a recent development in the AI landscape, Google has unveiled its latest model, Gemini 3, which the tech giant claims is its “most intelligent” AI to date. This launch has sparked significant competitive tension within the industry, particularly with OpenAI, which has reportedly entered a “code red” state as a result of Gemini 3’s impressive performance. According to AI performance metrics from LMArena, Gemini 3 has outperformed rivals, including OpenAI’s ChatGPT, leading to a noticeable decline in user traffic for OpenAI. A leaked memo from OpenAI’s CEO, Sam Altman, highlights the urgency of the situation, indicating that the company must respond to the rising competition from Gemini 3 and other models like Anthropic’s Claude.
The impact of Gemini 3’s launch is already being felt, as reports suggest OpenAI has experienced a nearly 6% drop in traffic since the new model’s debut. Data from SimilarWeb shows that ChatGPT’s average daily visits have fallen from 203 million to 191 million, equating to a loss of approximately 12 million users per day. While some of this decline may be attributed to seasonal factors like Thanksgiving, it nonetheless underscores the competitive pressure OpenAI is facing. This comes after a rocky period for OpenAI, particularly following the release of GPT-5, which received backlash for its less personable tone compared to earlier versions. Despite the technical advancements of GPT-5, the criticism led OpenAI to reintroduce GPT-4o, highlighting the delicate balance between user experience and functionality that the company is striving to maintain.
As OpenAI grapples with these challenges, it is also contending with a rapidly evolving enterprise landscape, where competitors like Anthropic are gaining traction, boasting over 300,000 business customers, including numerous Fortune 500 companies. With Google’s vast resources and data access bolstering Gemini 3’s capabilities, the stakes are high for OpenAI. In response, the company is actively pursuing partnerships and infrastructure deals with major players like Nvidia and Oracle to enhance its offerings. Altman’s recent commentary on the potential risks of an AI bubble further illustrates the precarious position OpenAI finds itself in, as it navigates the complexities of innovation and competition in an increasingly crowded market.
Recently, Google
introduced Gemini 3
, which the company called its “most intelligent” AI model yet. So far, the AI leaderboards agree, with Gemini 3 surging ahead of rivals like ChatGPT at
LMArena
. Now, OpenAI head honcho Sam Altman has reportedly declared “code red” at the company in response to increased pressure from competitors.
The announcement came in the form of a memo that
was leaked to
The
Wall Street Journal
. The contents of the memo are largely unknown, but the message was direct — OpenAI has some serious competition in the likes of Gemini 3 and Anthropic’s Claude, and the company needs to do something about it.
SEE ALSO:
Google Gemini 3 vs ChatGPT: How they compare
According to
a post on X
from former Googler Deedy Das, OpenAI has lost nearly 6 percent of its traffic since Gemini 3 launched. The data is sourced from SimilarWeb, which says that ChatGPT went from 203 million average daily visits to 191 million. If that data is accurate, it means OpenAI lost about 12 million people per day over the last week. Some of that may be due to Thanksgiving, but it’s a big shift.
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The problems started months ago with some slips from the reigning champion of AI chatbots. When GPT-5 was released earlier this year, it was immediately
criticized for its less friendly tone
compared to earlier models. Criticism was so intense that
OpenAI ultimately decided to bring back GPT-4o
. The data shows that GPT-5 is more capable than its predecessors, but its lack of personality irked hardcore users who used the bot every day. Plus, OpenAI has been walking a tightrope to balance functionality and safety, which it has
not done particularly well
.
Despite the criticisms, it seemed OpenAI was destined to keep its top spot among the AI chatbot competitors. However, Google released Gemini 3 in late November
to nearly universal praise
, with Google’s offerings topping nearly all of the benchmark leaderboards. Due to the sheer size and reach of Google, the company has a significant advantage in accessing training data, the lifeblood of AI models.
The competition is also ramping up on the enterprise side of things. Anthropic
boasts more than 300,000 business customers
as of September 2025, which includes some Fortune 500 companies.
These are all likely reasons why OpenAI is in code red; losing that many visitors is certainly noticeable. Of course, OpenAI is hardly staying still. The company is working on tons of initiatives, including
inking infrastructure deals
with the likes of Nvidia, Oracle, and other companies.
In November, Sam Altman wrote a
long post on X
addressing fears of an AI bubble and concerns that OpenAI is overextending itself.
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Disclosure: Ziff Davis, Mashable’s parent company, in April filed a lawsuit against OpenAI, alleging it infringed Ziff Davis copyrights in training and operating its AI systems.
Eric
Eric is a seasoned journalist covering US Tech & AI news.
