OpenAI in “code red” after losing 6% of its users in a week due to Gemini 3, report says
In a significant development in the AI landscape, Google has unveiled its latest AI model, Gemini 3, which the tech giant claims is its “most intelligent” iteration to date. The model has quickly gained traction, outperforming competitors like OpenAI’s ChatGPT on various AI leaderboards, such as LMArena. This surge in performance has prompted OpenAI’s CEO, Sam Altman, to issue a “code red” memo, signaling a critical response to the intensifying competition from Gemini 3 and other emerging models like Anthropic’s Claude. The leaked memo, reported by The Wall Street Journal, underscores the urgency for OpenAI to innovate and adapt in a rapidly evolving market where it faces formidable challengers.
The competitive landscape has shifted notably since the launch of Gemini 3, with reports indicating that OpenAI has experienced a decline in user traffic. According to data from SimilarWeb shared by former Google employee Deedy Das, ChatGPT’s average daily visits dropped from 203 million to 191 million, marking a loss of approximately 12 million users in just one week. While some of this decline may be attributed to seasonal factors like Thanksgiving, the shift is significant enough to raise alarms within OpenAI. The challenges for OpenAI began earlier this year with the release of GPT-5, which faced backlash for its less engaging tone compared to its predecessors. This criticism was severe enough that OpenAI had to revert to the previous model, GPT-4o, to retain its user base.
As Google leverages its vast resources and access to extensive training data, it has positioned Gemini 3 to dominate benchmark tests and capture user interest. Meanwhile, Anthropic is also making strides in the enterprise sector, boasting over 300,000 business customers by September 2025. This growing competition is a clear signal that OpenAI cannot afford to be complacent, prompting the company to pursue various initiatives, including partnerships with major tech firms like Nvidia and Oracle. Amid these challenges, Altman has expressed concerns about the potential for an AI bubble and the risks of overextension for OpenAI, indicating a need for strategic recalibration in the face of fierce competition. As the AI race heats up, the stakes are high for all players involved, and the coming months will be crucial for determining the future dynamics of this rapidly changing field.
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.
