Summary
OpenAI CEO Sam Altman has privately acknowledged that Google’s rapid progress with Gemini 3 is creating temporary economic headwinds for the company. In a leaked memo, he warned employees of rough vibes ahead, even as he insisted OpenAI is catching up fast with an ambitious new research push.
What Happened: Google’s Leap and Altman’s Leaked Memo
Google’s Gemini 3 has shaken the AI landscape. Internal evaluations at OpenAI indicated that Gemini 3 outperformed OpenAI models in coding, reasoning and multimodal tasks. This pressured Altman to send a frank memo to employees.
In that memo, he admitted Google has been “doing excellent work recently”, especially in the pre-training stage of model development, an area where OpenAI has struggled to maintain momentum during GPT-5 development.
Altman also said he expects the external environment to be difficult for some time: “I expect the vibes out there to be rough for a bit.”
This marked a strategic shift from the company’s old mindset of being the default winner to a more realistic, wartime footing.
Key Info
- Google’s Gemini 3 has surpassed OpenAI in several benchmark categories.
- Internal models show OpenAI’s revenue growth could shrink to single digits by 2026.
- User engagement with ChatGPT has cooled following stricter safety controls.
- Enterprise AI demand is slowing as companies re-evaluate ROI.
- OpenAI is building a new model named Shallotpeat, designed to fix pre-training issues.
Key Details at a Glance
| Aspect | Detail |
|---|---|
| Challenge | Google’s Gemini 3 outperforming OpenAI models |
| Warning | Temporary economic headwinds and rough vibes |
| Strategy | Long term focus on ambitious research and superintelligence |
| New Model | Shallotpeat to repair pre-training weaknesses |
| Forecast | Growth could slow to 5–10 percent by 2026 |
| Competitors | Google and Anthropic narrowing the gap |
Why It Matters: A New Phase in the AI Race
Altman’s memo marks a rare moment: an industry leader openly acknowledging it is temporarily behind. The shift reflects a broader global recalibration. Google brings massive compute resources, cloud dominance and deep financial flexibility. Anthropic is pushing toward break-even by 2028. Enterprises are slowing AI adoption as hype cools.
In this environment, OpenAI is no longer operating with the comfort of an assumed lead. The race has become more unpredictable and more expensive.
Impact on You: What Changes for Users and Developers
This competitive moment will shape future product updates for millions of users.
- Expect faster model upgrades, as OpenAI accelerates research.
- Some near term features may slow while long term bets take priority.
- Guardrails may remain tight as safety continues to matter more than engagement.
- Developers will see rapid innovation cycles across the industry.
The big-picture outcome is positive: innovation is speeding up because competition is heating up.
Samay Street FAQs
1. What did Altman actually tell employees?
He warned about rough vibes, temporary economic headwinds and acknowledged that Google’s work in pre-training has been excellent, but added that OpenAI is catching up fast.
2. Why is Gemini 3 such a big deal?
It outperforms OpenAI models on reasoning, coding and multimodal tasks, tearing into what was once OpenAI’s moat.
3. What is Shallotpeat?
A new OpenAI model aimed at fixing pre-training issues and preparing the company for the next generation of AI.
4. Why is OpenAI worried about revenue?
Forecasts show growth may slow sharply as enterprise interest cools and cloud costs remain high.
5. Is Google winning the AI race?
Google leads for the moment, but the race is still open. OpenAI believes its long term bets will shift momentum again.
Samay’s Take
Google may have the lead today but the AI race is not a linear graph. Momentum changes fast. Altman’s memo is not a confession of defeat but a reminder that even giants face storms. The next model that wins will decide the global balance of AI power.
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Sources
- The Information – Original reporting on Sam Altman’s leaked internal memo.
- The Economic Times (ET Tech) – Coverage of the memo and Google’s AI progress.
- Reuters – Reporting on OpenAI’s revenue targets and financial outlook.
- Industry benchmark reports – Developer feedback on Gemini 3 outperforming GPT models.
- Enterprise AI market analyses – Notes on slowing adoption and ROI concerns.
