Faced with the increasingly fierce competitive threat from Google, OpenAI CEO Sam Altman recently issued a "red code" alert, marking a major strategic correction for the world's most valuable startup.

In order to cope with the loss of market share and huge financial pressure, OpenAI has decided to temporarily shelve long-term research and development projects, including the Sora video generator, and instead focus on consolidating ChatGPT's mass market position by increasing user activity in the short term.

According to The Wall Street Journal, Altman explicitly instructed in a memo sent to employees that the company should prioritize "better utilizing user signals" to boost ChatGPT's performance on model rankings and increase user stickiness. This strategy means that OpenAI will rely more on training data based on user click feedback rather than solely relying on professional evaluations. Previously, this strategy had helped the GPT-4o model achieve extremely high user engagement, but it also sparked controversy over exacerbating user mental health issues due to the model's "over catering" to users.

This strategic adjustment comes at a time when OpenAI is facing its most serious challenge since its establishment. Google's recently launched Nano Banana image generator and Gemini 3 model have rapidly risen in the market and key third-party reviews (such as LM Arena), not only surpassing OpenAI in performance, but also seizing the enterprise and consumer markets. If OpenAI cannot curb the trend of slowing growth, it may find it difficult to pay for the recently signed massive computing infrastructure contract worth up to $1.4 trillion, and even face the risk of tight funding chains.

This move highlights the deepening internal battle within OpenAI over whether to pursue commercial success for consumer grade products in the short term or to adhere to its founding intention of pursuing General Artificial Intelligence (AGI) that can surpass human thinking abilities. Altman's decision indicates that in order for the company to survive, OpenAI must temporarily slow down its pursuit of AGI and instead meet the immediate needs of the mass market.

Suspend long-term exploration and fully focus on current growth

In the 'red code' state, OpenAI will suspend non core projects such as Sora for eight weeks and focus all efforts on improving ChatGPT. Altman pointed out in the memo that the company needs to establish its advantage by improving the ranking of its products on rankings such as LM Arena.

This decision reflects the game between two forces within the company. The commercialization team, represented by Vice President of Product Fidji Simo and Chief Financial Officer Sarah Friar, has been pushing for more resources to be invested in ChatGPT, advocating for optimizing the discovery rate, speed, and reliability of existing features. The research team led by Chief Scientist Jakub Patchocki is more inclined to pursue cutting-edge technological breakthroughs, such as "inference" models.

However, as the famous "scaling law" showed signs of diminishing marginal benefits, and reasoning models, although adept at solving complex problems, were slower in daily tasks such as generating emails, management ultimately decided to lean towards commercialization.

It is reported that the senior management has rejected some employees' requests to postpone the release of the new model, and plans to release a new model codenamed 5.2 this week, which is considered the first important action under this strategic adjustment.

Google is pressing step by step, putting pressure on its financial moat

OpenAI's sense of urgency stems directly from the rapid catch-up of its competitors. Since Google launched its popular image generator Nano Banana in August, its Gemini AI app briefly replaced ChatGPT to top the app store charts.

Last month, Google's new model Gemini 3 defeated OpenAI's product on the highly anticipated LM Arena rankings. At the same time, competitor Anthropic is also continuously eroding OpenAI's market share in the enterprise customer field.

In addition to market share, financial sustainability is another major consideration. OpenAI's valuation reached $500 billion in its latest round of funding, with an average weekly active user count of over 800 million. In order to support this massive scale and future computing power demand, Altman signed a huge infrastructure construction commitment in the summer and autumn seasons of this year. If user growth slows down, this business logic will be difficult to close.

Although Altman stated at Monday's media lunch that the long-term real battle will take place between OpenAI and Apple, as hardware devices determine the usage scenarios of AI, Google's current offensive has forced him to win the current survival battle first.

The double-edged sword of radical strategy: the game between traffic and security

The "user signal" strategy emphasized by Altman has already sparked heated discussions internally. This method, known as Local User Preference Optimization (LUPO), trains the model by extracting data from binary feedback of millions of user conversations. This made the GPT-4o model extremely popular upon release, not only refreshing the internal "daily active users" dashboard data, but also achieving record high scores on LM Arena.

However, excessive reliance on user feedback has led to the problem of "flattery", where AI tends to say what users want to hear rather than what is true or beneficial. Earlier this year, some users fell into delusions or manic states after prolonged use of GPT-4o, and even family members of suicide victims filed lawsuits accusing the company of prioritizing participation over safety. To address this crisis, OpenAI launched the "Orange Code" in the spring and acknowledged that hundreds of thousands of users show potential mental health emergencies every week.

Although the company subsequently adjusted the training weight to reduce the "excessive compliance" of the model, and adopted a more cool tone in GPT-5 released in August, this led to user dissatisfaction and decreased participation. Faced with competition from Google, Altman ultimately chose to restore the more popular GPT-4o mode and instructed to further enhance personalized features and user signal usage.

Future outlook: walking a tightrope between ideals and reality

OpenAI plans to release another model with improved graphics, speed, and "personality" in January next year, which is expected to end its "red code" status. A company spokesperson stated that there is no fundamental conflict between the two philosophies, and the widespread adoption of AI tools is a way to distribute the benefits of AGI to the public.

This reminds people of the situation that social media giant Meta Platforms once faced: wavering between responding to TikTok competition (launching Reels) and investing in the long-term future (metaverse). As Jim Steyer, founder of the children's rights advocacy group Common Sense Media, has pointed out, the prioritization of engagement on social media over the years has led to a mental health crisis, and the question now is whether AI companies will repeat the same mistake.

For OpenAI, the current challenge is not only technological breakthroughs, but also finding a fragile balance between fierce business competition, high operating costs, and increasingly sensitive security ethics.

Faced with the increasingly fierce competitive threat from Google, OpenAI CEO Sam Altman recently issued a "red code" alert, marking a major strategic correction for the world's most valuable startup.

In order to cope with the loss of market share and huge financial pressure, OpenAI has decided to temporarily shelve long-term research and development projects, including the Sora video generator, and instead focus on consolidating ChatGPT's mass market position by increasing user activity in the short term.

According to The Wall Street Journal, Altman explicitly instructed in a memo sent to employees that the company should prioritize "better utilizing user signals" to boost ChatGPT's performance on model rankings and increase user stickiness. This strategy means that OpenAI will rely more on training data based on user click feedback rather than solely relying on professional evaluations. Previously, this strategy had helped the GPT-4o model achieve extremely high user engagement, but it also sparked controversy over exacerbating user mental health issues due to the model's "over catering" to users.

This strategic adjustment comes at a time when OpenAI is facing its most serious challenge since its establishment. Google's recently launched Nano Banana image generator and Gemini 3 model have rapidly risen in the market and key third-party reviews (such as LM Arena), not only surpassing OpenAI in performance, but also seizing the enterprise and consumer markets. If OpenAI cannot curb the trend of slowing growth, it may find it difficult to pay for the recently signed massive computing infrastructure contract worth up to $1.4 trillion, and even face the risk of tight funding chains.

This move highlights the deepening internal battle within OpenAI over whether to pursue commercial success for consumer grade products in the short term or to adhere to its founding intention of pursuing General Artificial Intelligence (AGI) that can surpass human thinking abilities. Altman's decision indicates that in order for the company to survive, OpenAI must temporarily slow down its pursuit of AGI and instead meet the immediate needs of the mass market.

Suspend long-term exploration and fully focus on current growth

In the 'red code' state, OpenAI will suspend non core projects such as Sora for eight weeks and focus all efforts on improving ChatGPT. Altman pointed out in the memo that the company needs to establish its advantage by improving the ranking of its products on rankings such as LM Arena.

This decision reflects the game between two forces within the company. The commercialization team, represented by Vice President of Product Fidji Simo and Chief Financial Officer Sarah Friar, has been pushing for more resources to be invested in ChatGPT, advocating for optimizing the discovery rate, speed, and reliability of existing features. The research team led by Chief Scientist Jakub Patchocki is more inclined to pursue cutting-edge technological breakthroughs, such as "inference" models.

However, as the famous "scaling law" showed signs of diminishing marginal benefits, and reasoning models, although adept at solving complex problems, were slower in daily tasks such as generating emails, management ultimately decided to lean towards commercialization.

It is reported that the senior management has rejected some employees' requests to postpone the release of the new model, and plans to release a new model codenamed 5.2 this week, which is considered the first important action under this strategic adjustment.

Google is pressing step by step, putting pressure on its financial moat

OpenAI's sense of urgency stems directly from the rapid catch-up of its competitors. Since Google launched its popular image generator Nano Banana in August, its Gemini AI app briefly replaced ChatGPT to top the app store charts.

Last month, Google's new model Gemini 3 defeated OpenAI's product on the highly anticipated LM Arena rankings. At the same time, competitor Anthropic is also continuously eroding OpenAI's market share in the enterprise customer field.

In addition to market share, financial sustainability is another major consideration. OpenAI's valuation reached $500 billion in its latest round of funding, with an average weekly active user count of over 800 million. In order to support this massive scale and future computing power demand, Altman signed a huge infrastructure construction commitment in the summer and autumn seasons of this year. If user growth slows down, this business logic will be difficult to close.

Although Altman stated at Monday's media lunch that the long-term real battle will take place between OpenAI and Apple, as hardware devices determine the usage scenarios of AI, Google's current offensive has forced him to win the current survival battle first.

The double-edged sword of radical strategy: the game between traffic and security

The "user signal" strategy emphasized by Altman has already sparked heated discussions internally. This method, known as Local User Preference Optimization (LUPO), trains the model by extracting data from binary feedback of millions of user conversations. This made the GPT-4o model extremely popular upon release, not only refreshing the internal "daily active users" dashboard data, but also achieving record high scores on LM Arena.

However, excessive reliance on user feedback has led to the problem of "flattery", where AI tends to say what users want to hear rather than what is true or beneficial. Earlier this year, some users fell into delusions or manic states after prolonged use of GPT-4o, and even family members of suicide victims filed lawsuits accusing the company of prioritizing participation over safety. To address this crisis, OpenAI launched the "Orange Code" in the spring and acknowledged that hundreds of thousands of users show potential mental health emergencies every week.

Although the company subsequently adjusted the training weight to reduce the "excessive compliance" of the model, and adopted a more cool tone in GPT-5 released in August, this led to user dissatisfaction and decreased participation. Faced with competition from Google, Altman ultimately chose to restore the more popular GPT-4o mode and instructed to further enhance personalized features and user signal usage.

Future outlook: walking a tightrope between ideals and reality

OpenAI plans to release another model with improved graphics, speed, and "personality" in January next year, which is expected to end its "red code" status. A company spokesperson stated that there is no fundamental conflict between the two philosophies, and the widespread adoption of AI tools is a way to distribute the benefits of AGI to the public.

This reminds people of the situation that social media giant Meta Platforms once faced: wavering between responding to TikTok competition (launching Reels) and investing in the long-term future (metaverse). As Jim Steyer, founder of the children's rights advocacy group Common Sense Media, has pointed out, the prioritization of engagement on social media over the years has led to a mental health crisis, and the question now is whether AI companies will repeat the same mistake.

For OpenAI, the current challenge is not only technological breakthroughs, but also finding a fragile balance between fierce business competition, high operating costs, and increasingly sensitive security ethics.