OpenAI CEO Sam Altman Warns Staff of 'Rough Vibes' as Google's AI Advances Challenge Company's Leadership

OpenAI CEO Sam Altman's big warning to his employees in his leaked memo: 'Google has been doing excellent...'

OpenAI CEO Sam Altman acknowledges "rough vibes" and "economic headwinds" following Google's AI advancements. He admitted to employees that competitors are narrowing the gap, impacting revenue growth projections. Despite this, Altman expressed confidence in catching up quickly and emphasized the critical importance of focusing on achieving superintelligence, even as OpenAI navigates multiple ambitious goals. OpenAI CEO Sam Altman has conceded that the company is facing "rough vibes" and "economic headwinds" just days after Google reclaimed the AI performance crown with Google's Gemini 3 Pro launch. According to The Information, a leaked memo from last month starkly contrasts with Altman's public trillion-dollar ambitions and he reportedly warned employees that revenue growth could plummet to single digits by 2026. Altman acknowledged to the OpenAI team that "Google has been doing excellent work recently in every aspect," particularly in pre-training. In an internal memo to his employees, Sam Altman has acknowledged the AI advancements made by Google and that it could impact the company but also expressed confidence in catching up. In a recent internal memo to colleagues, Altman acknowledged that the AI startup rival's success could "create some temporary economic headwinds for our company." However, Altman reassured that OpenAI is "catching up fast" and anticipates emerging as the leader in the AI race. ALSO READ: JPMorgan's Jamie Dimon throws lavish birthday party for King Charles III -- full menu featuring Yorkshire pudding and Beef pie revealed It is pertinent to note that Sam Altman's memo was drafted before the launch of Google's Gemini 3, which the company calls its most advanced AI model yet. Software developers say the new system delivers strong results in areas like automated website creation, product design and coding -- work that generates major revenue for OpenAI and rivals such as Anthropic. Acknowledging Google's resurgence, Sam Altman conceded that OpenAI is now in a position of "catching up fast" and needed to focus on "very ambitious bets" even at the cost of getting "temporarily behind in the current regime." "We need to stay focused through short-term competitive pressure," Altman reportedly wrote in the memo, adding that it was "critically important" for the majority of the research team to stay focused on achieving superintelligence. Questions about OpenAI's slowing momentum surfaced earlier this summer. On the company's recent quarterly earnings call, CFO Sarah Friar acknowledged that engagement with the widely used ChatGPT chatbot had softened, even as overall financial performance remained solid. In his internal memo, Altman said that competitors such as Google and Anthropic are narrowing the gap in the AI race. ALSO READ: Google extends free Google AI Pro for US college students for one more year: Check eligibility, how to claim the offer and more OpenAI is reportedly working on a new language model codenamed "Shallotpeat" is currently in development. A person familiar with the matter said this model specifically aims to fix bugs emerged in the pre-training process. Altman concluded the note by urging focus, admitting that despite the company's massive valuation, "we know we have some work to do but we are catching up fast." Altman also encouraged OpenAI employees to stay confident and focus on the company's larger goals. "We have built enough strength as a company to weather great models shipping elsewhere competition... (so), having most of our research team focused on really getting to superintelligence is critically important,"Altman wrote in the internal memo. "It s**ks that we have to do so many hard things at the same time -- the best research lab, the best AI infrastructure company, and the best AI platform/product company -- but such is our lot in life. And I wouldn't trade positions with any other company," Altman added. ALSO READ: Who are Netra Mandena and Vamsi Gadiraju? Inside the star-studded Udaipur wedding attended by Jennifer Lopez, Trump Jr and Justin Bieber OpenAI has joined hands with Apple's largest supplier, Foxconn, to design and manufacture AI data-centre components in the United States. As part of the deal, OpenAI will contribute to the development of next-generation server systems and is expected to source Foxconn-built hardware in the near future. Altman said the partnership would bolster America's manufacturing base, calling it "a step toward ensuring the core technologies of the AI era are built here [in the US]." He added that expanding AI infrastructure marks a "generational opportunity to reindustrialise America."

Sam Altman warns OpenAI staff of challenging months ahead as Google gains ground in AI

Altman remains confident in OpenAI's long-term strategy despite financial headwinds and rising competition. OpenAI CEO Sam Altman has told staff that the coming months may be challenging as the company faces growing competition from Google and other major AI players. In a memo obtained by The Information, Altman said that Google's recent announcements, particularly its most advanced AI systems, including the so-called Gemini 3.0 model, have shifted the competitive dynamics in the industry. He explained that these developments have not only altered the pace at which the sector is moving but have also raised the bar for everyone involved in advanced AI research. He added that other firms, such as Anthropic, are also making rapid progress, further intensifying the global race. As highlighted in the report, Altman reportedly told staff that rivals are 'closing the gap', even though he believes OpenAI is still moving quickly and remains well-positioned. Altman urged employees to remain focused on OpenAI's long-term mission, noting that while the company may face some financial pressure in the near term, it continues to move at a faster pace than most rivals and remains committed to innovation at scale. Also read: Zoho Notebook: Smart AI, good design, but is it a powerhouse? Google's Gemini 3.0 has already been integrated across Google Search, Workspace, Android, and other major services, reaching over 650 million monthly users. This deep ecosystem integration gives Google a major advantage, as people interact with the AI daily without actively seeking it out or even realising that they are using an advanced model behind the scenes. Altman highlighted that such scale and distribution translate into strong economic and technical leverage, making OpenAI's competitive landscape more demanding and, at times, more unpredictable. He noted that Google's ability to embed its AI services directly into widely used products gives it a powerful head start, which OpenAI must work harder to counter. The report also pointed out that Altman acknowledged Google's scale provides a sizeable economic advantage, particularly as Google weaves its Gemini technology deeper into its ecosystem, allowing billions of users to encounter its AI capabilities by default. OpenAI is also contending with rising competition from Anthropic, whose Claude assistant has become particularly strong in coding-related tasks and is gaining attention among developers and enterprises. In response, OpenAI has been working to upgrade its Codex technology in an effort to maintain its edge in AI-assisted programming, which remains one of the most important and commercially relevant areas of the AI industry. Altman acknowledged that the gap between the companies is narrowing, but he reiterated that OpenAI's rapid research pace, strong technical foundations, and focus on pushing the boundaries of what is possible remain key strengths in staying ahead. He emphasised that competition, while challenging, is also a sign of a healthy and evolving market. According to the memo, Altman also stated that 'having most of our research team focused on really getting to superintelligence is critically important, even if balancing research, product and infrastructure simultaneously "s**ks" at times'. He remarked that despite the difficulty, he 'wouldn't trade positions with any other company'. Also read: Vivo X300 vs iQOO 15: Price, camera, performance, display and everything we know so far The memo also pointed to potential short-term economic challenges, with investor sentiment cooling as the AI market becomes more crowded and funding expectations shift. Altman stressed, however, that any financial pressures would be temporary. He said OpenAI is well-resourced and continues to invest heavily in research and infrastructure to secure its long-term advantage. Despite rising operational costs and an increasingly competitive environment, the company remains on track to meet its 2025 revenue target of $13 billion, which he described as an encouraging sign of stability amid rapid industry change. He warned, however, that sentiment outside the company may be 'rough' for a period and referred to these challenges as 'temporary economic headwinds', according to reports based on the memo. Altman encouraged employees to stay committed to OpenAI's broader ambitions. He noted that much of the research team is now working on superintelligence, which he described as a crucial long-term priority that will define the next era of AI development. While he admitted that managing research, infrastructure, and product development at the same time is challenging, he said he remains proud of the company's position, technical progress, and continued ability to attract world-class talent. He also emphasised that OpenAI must continue building the best research lab, the best AI infrastructure company, and the best AI platform and product company simultaneously, something he described as difficult, but unavoidable given OpenAI's mission. Also read: LG Gaming Portal brings cloud gaming to webOS TVs in India, along with official Xbox app support Ultimately, while Google has gained fresh momentum with Gemini 3.0, Altman's memo underscores OpenAI's confidence in its research, its innovation pipeline, and its ability to remain a leading force in the global race for artificial intelligence.