OpenAI declares red alert as Google's Gemini 3 shakes market

WISE NEWS PRESS / SAN FRANCISCO, USA — DEC. 08, 2025

OpenAI CEO Sam Altman has reportedly issued a "red alarm" to his staff, instructing them to prioritize ChatGPT development over other products after Google's latest AI model, Gemini 3, outperformed OpenAI's offerings in key industry benchmarks.

The release of Gemini 3 by Google's parent company Alphabet in November stunned OpenAI, a company that had maintained a clear lead in the sector since 2022. While OpenAI plans to announce a new "reasoning" model in the coming weeks that reportedly beats Gemini 3 in internal tests, the market dominance once held by the ChatGPT creator is no longer guaranteed.

Capital and Distribution Advantage

Deutsche Bank Research analyst Adrian Cox notes that having the best model is no longer sufficient to win the AI race; access to computing power and distribution channels is now critical.

"They have massive distribution possibilities thanks to the huge user base already embedded in the online environment; they also have large-scale computing capacity because they have access to a large number of data centers," Cox said, referring to Google's structural advantages.

While ChatGPT still reaches over 800 million weekly users, Alphabet has integrated Gemini 3 into its search engine and cloud services. Alphabet CEO Sundar Pichai stated that more than 70 percent of their Cloud customers are using their AI, with the Gemini app reaching over 650 million monthly users.

The Profitability Challenge

Unlike Google, which can leverage massive ad revenues to fund AI development, OpenAI relies on direct monetization through subscriptions and B2B integrations. Despite significant investment from Microsoft, Altman has admitted the company is not yet profitable.

Investors have been told that 2030 will be OpenAI's first profitable year, but HSBC predicts the company could face cumulative losses exceeding $70 billion by that time due to rising costs. Meanwhile, Google plans to invest up to $93 billion in AI this year alone, supported by its own custom AI chips that reduce reliance on expensive Nvidia hardware.

China Closing the Gap

The competitive landscape is further complicated by the rise of Chinese AI models. Baidu's "DeepSeek" model, introduced in September, reportedly performs on par with OpenAI's GPT-5 and Google's Gemini 2.5 Pro.

Nvidia CEO Jensen Huang recently warned on X that China is "only nanoseconds behind America" in artificial intelligence capabilities. Beijing is reportedly using a strategy of flooding Western markets with these products at dumping prices to sideline competitors.

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