OpenAI hits pause on ChatGPT ads as CEO declares a ‘code red’

OpenAI CEO Sam Altman issued an all-hands “code red” to improve ChatGPT – a move that could delay the company’s advertising plans – according to an internal memo obtained by The Wall Street Journal.

Driving the news. Altman told employees the company must urgently improve ChatGPT’s personalization, speed, reliability, and ability to handle a wider range of questions.

• Daily calls, temporary team reassignments, and a companywide push now center on one priority: make ChatGPT better, fast.
• Nick Turley, who leads ChatGPT, said the team is focused on growing the assistant and making it feel “more intuitive and personal.”

Why now? Competition is catching up. The memo signals rising pressure on several fronts:

• Google: Its upgraded Gemini model topped OpenAI on key benchmarks last month.
• User growth: Gemini’s ecosystem jumped from 450 million monthly active users in July to 650 million in October, helped by new tools like the Nano Banana image generator.
• Anthropic: Gaining ground with enterprise customers as the “safer, more predictable” LLM provider.

OpenAI is also facing heavy financial strain, with planned data center investments in the hundreds of billions, while the company remains unprofitable and reliant on constant fundraising. Internal forecasts suggest that OpenAI must get roughly $200 billion in revenue by 2030 to become profitable.

What’s getting delayed. To refocus on ChatGPT quality, Altman said OpenAI is pushing back work on:

• Advertising initiatives.
• AI agents for health and shopping.
• A personal assistant called Pulse.

What’s next. Altman told staff a new reasoning model arriving next week is already outperforming Google’s latest Gemini release.

• OpenAI previously declared a “code orange” over ChatGPT quality – part of an internal urgency scale (yellow → orange → red). GPT-5’s August launch drew criticism for feeling colder, being less helpful on simple tasks, and acting too cautiously. A November update made the model feel warmer and better at following instructions.

Why we care. It appears that OpenAI is pausing its rollout of ChatGPT ads to focus on product quality. That means advertisers hoping to use ChatGPT as an ad channel will have to wait longer.

Flashback. This isn’t the first code-red moment in the AI arms race. Google once issued its own “code red” because of OpenAI. In December 2022, after ChatGPT went viral, Google CEO Sundar Pichai declared a companywide code red, calling the chatbot an existential threat to Google Search. What followed:

• Founders returned: Larry Page and Sergey Brin rejoined product meetings after years away.
• Search overhauled: Google accelerated plans to add conversational features to Search.
• Product surge: A leaked slide deck outlined 20+ new AI products and a demo of a chatbot-powered version of Search.

The report. OpenAI Declares ‘Code Red’ as Google Threatens AI Lead