Introduction: More Than Just a “Code Red”

Recently, news of an internal “Code Red” memo at OpenAI has spread rapidly through tech circles, sparking widespread discussion and speculation. However, this is far more than a simple strategic adjustment. Behind this highest-level emergency mobilization order lies a dramatic shift in the AI industry’s power structure, as OpenAI faces a two-front battle: a powerful external pincer movement led by a resurgent Google, and a severe internal crisis involving talent and strategy. This article will dive deep to reveal the five most surprising and impactful truths behind this event.

1. From Hunter to Hunted: The Stunning Reversal with Google

In the fast-moving AI landscape, dominance is fleeting—a lesson OpenAI is learning the hard way, especially in its jaw-dropping role reversal with Google.

Rewind to November 2022, when ChatGPT burst onto the scene, overnight disrupting Google’s long-held dominance in AI and forcing them to issue their own “Code Red” to catch up. The prevailing narrative was that “Google had blown its lead,” seemingly falling behind in this race.

However, Google mounted a powerful counterattack. They adopted an “un-Google-like” strategy, releasing and iterating their AI models at unprecedented speed, abandoning their traditionally cautious approach. The decisive moment came recently when Google released Gemini 3. This model comprehensively outperformed OpenAI’s models across multiple industry benchmarks, with such impact that Salesforce CEO Marc Benioff commented:

“I’ve used ChatGPT every day for three years. Just spent two hours on Gemini 3. I’m not going back. The leap is insane—reasoning, speed, images, video… everything is sharper and faster. It feels like the world just changed, again.”

The data further confirms Google’s strong comeback: according to TechCrunch, Gemini’s monthly active users surged from 450 million to 650 million in just three months. The former challenger has now become the leader. But OpenAI’s threats don’t come only from outside.

2. Brain Drain: OpenAI Is Losing Its “Brains”

Just as Google’s Gemini 3 reset the competitive baseline, an unsettling internal collapse is intensifying OpenAI’s pressure. According to Fast Company’s in-depth report, the most serious issue is the “brain drain”—a succession of top scientists and engineers departing.

  • Andrej Karpathy: Founding member focused on computer vision and generative models, left in early 2024.
  • Ilya Sutskever: Co-founder and former Chief Scientist with profound influence on OpenAI’s foundational research, left in mid-2024 to found his own lab, SSI (Safe Superintelligence).
  • Mira Murati: Former CTO who briefly served as interim CEO, left in late 2024 to found Thinking Machines Labs.

This list doesn’t include many other senior researchers and product leaders who have also chosen to leave, including co-founder John Schulman (who joined Anthropic) and safety research lead Jan Leike. The loss of these core minds has not only weakened OpenAI’s innovation capabilities but has directly supplied ammunition to its competitors.

3. The Counterintuitive Truth: Your ChatGPT May Actually Be “Getting Dumber”

As external competition intensifies and internal talent bleeds out, a counterintuitive observation is fermenting among users: OpenAI’s core product, ChatGPT, seems to be regressing in user experience. This frustration stems from a growing perception among users who have personally observed ChatGPT becoming “increasingly inaccurate” and “hallucinating far more frequently than previous models.”

This regression in user experience can be summed up in one phrase: “ChatGPT has gotten dumber than before.”

According to The Wall Street Journal’s report, the root cause may be OpenAI’s strategic defocus. The company has invested too many resources in browsers, voice modes, AI agents, and other peripheral features, inadvertently neglecting the gravitational core of its success—making the model itself more powerful and intelligent. This neglect of the core product is strategically catastrophic, creating a golden opportunity for competitors to attract users with a simpler, more powerful promise: a smarter model.

4. All-Out Competitor Siege: The Era of Single Dominance Is Over

While Google’s threat dominates headlines, a multi-front war has erupted across the entire AI landscape, threatening to completely dismantle OpenAI’s market dominance. According to our 2025 AI Trends analysis, the competitive landscape has fundamentally changed:

  • Anthropic: Their Claude model is increasingly popular among enterprise customers and the programming community, with many considering it superior for code generation. Claude Opus 4.5 has achieved impressive scores across multiple benchmarks.
  • xAI: Their Grok model has also beaten OpenAI in some benchmarks.
  • Meta: The open-source LLaMA series continues to provide powerful alternatives for the developer community.
  • DeepSeek: China’s DeepSeek model has also shown competitiveness in specific domains.

Even more ironic is that today’s competitive landscape is being reshaped not only by giants like Google and Anthropic, but also by startups born from OpenAI’s own DNA, such as Ilya Sutskever’s SSI and Mira Murati’s Thinking Machines Labs. OpenAI faces pressure from all directions, and its once-commanding lead has been severely shaken. In this era of constantly shuffling LLM rankings, no one can hold the throne securely.

5. PR Masterstroke? The “Code Red” May Just Be a Well-Orchestrated Marketing Show

Let’s take a more critical analyst’s perspective: could this “Code Red” simply be a brilliant marketing move by OpenAI?

This speculation isn’t unfounded. Looking back, Sam Altman and his team have indeed shown a tendency to “over-hype and promote, only to fall short of fully delivering on promises.” For instance, the release of GPT-5 disappointed some users. Therefore, this public “Code Red” may well be a strategic move aimed at reclaiming narrative control in the AI space and building suspense and anticipation for upcoming model releases.

In fact, another piece of information leaked from the memo seems to confirm this: according to The Information’s report, OpenAI plans to release a new reasoning model next week, claiming its internal evaluations already surpass Gemini 3. All of this points to one possibility: this crisis declaration may just be a carefully choreographed prelude.

Conclusion: OpenAI at a Crossroads

Ultimately, OpenAI’s “Code Red” is an admission of vulnerability. It’s an emergency response forced by intense external competition, severe internal turmoil, and critical strategic defocus—a return to basics under multiple pressures. This company, which nearly lost its core mission in pursuit of being everywhere, is now trying to refocus on polishing the core product that made it famous—ChatGPT.

Is this strategic pivot a masterful crisis management move, or a desperate bid to recapture former glory? The answer to this question will define the next chapter of the AI race. Has the era of AI dominated by a single king already come to an end?

For deeper insights into the latest AI industry developments, check out our Complete Guide to Generative AI and Vibe Coding Trend Analysis.

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