OpenAI is deprioritizing work on advertising as it focuses on improving the quality of ChatGPT, reports The Information. OpenAI CEO Sam Altman declared a "code red" on Monday, and told employees that the company needs to improve ChatGPT so it doesn't fall behind competitors like Google and Anthropic.
Altman said that OpenAI needs to work on personalization for each user, image generation, and model behavior like speed and reliability.
Google debuted Gemini 3 Pro in November, and it outperforms ChatGPT on several benchmarking tests. Google has been luring users with its Nano Banana AI image generator and Anthropic's Claude is popular with business customers.
OpenAI's plan to start showing customers ads leaked earlier this week, but Altman told employees that ads are now on the backburner. Work on advertising, shopping AI agents, and a more proactive and personalized version ChatGPT assistant called Pulse has been delayed. OpenAI has been testing several kinds of ads, including ads that would be shown during online shopping requests, but introducing ads could push users to other chatbots.
Following the employee memo, ChatGPT lead Nick Turley announced that OpenAI would focus on "making ChatGPT more capable, continue growing, and expand access around the world -- while making it feel even more intuitive and personal."
OpenAI is not profitable, and it has to rely on its user numbers for investments. If it loses a significant number of users to Google, it could run into financial trouble.
OpenAI will ship a new reasoning model next week, which Altman said is ahead of Gemini 3 in internal evaluations.
