The AI race just got intensified. Google’s freshly launched Gemini 3 model, which CEO Sundar Pichai hailed as its “most intelligent” one yet. Gemini 3 is outperforming OpenAI’s latest GPT-5.1 model across key benchmarks in reasoning, coding, and multimodal tasks, thus sparking internal alarm bells at OpenAI. In a leaked memo to staff, OpenAI CEO Sam Altman admitted the pressure, warning of “temporary economic headwinds” and “rough vibes” as Google’s resurgence threatens to erode OpenAI’s lead.
While Altman insists his team is “catching up fast,” the memo reveals a company shifting to “wartime footing” amid shrinking user gaps and stalled innovations.
Gemini 3 vs GPT-5.1: How Google edges ahead in benchmarks and scale
The Gemini 3 model, unveiled on November 18, isn’t just a model – it’s a full-stack assault. Integrated from day one into Google Search via the ‘AI Mode’ toggle, Workspace, and Android phones. Right from the moment it rolls out, the Gemini 3 model reaches billions of users without downloading a separate app.
Independent tests show it topping GPT-5.1 in areas like code generation and logical reasoning, with ‘PhD-level’ capabilities in complex tasks. Unlike OpenAI’s GPT-5.1, which faced backlash for routing bugs that made it “seem way dumber” despite raw power, Gemini 3 leverages Google’s vast data banks and custom TPUs for efficient scaling.
In his pre-launch memo, Altman praised Google’s excellent work recently in every aspect, particularly in pre-training AI – an area where OpenAI hit snags during GPT-5 development.He concluded that OpenAI is now catching up fast and was urging focus on very ambitious bets like superintelligence, even if that translates to temporary lags.
However, analysts have warned that OpenAI’s focus on the long-term play could lead to Gemini’s dominance, which could cause OpenAI to fall behind.
OpenAI’s risks at a glance
OpenAI’s lead is cracking. The user engagement with its products has cooled, with CFO Sarah Friar noting softened user interest despite strong finances. Altman also flagged potential revenue growth dipping to 5% by 2026, citing short-term competitive pressure from Gemini and rivals like Anthropic’s Claude, the latter excelling in conversational coding. Google also enjoys an ecosystem advantage, something that OpenAI has to struggle.
OpenAI’s comeback plan
In response to the new threat, OpenAI is working on Shallotpeat, a codenamed model to fix pre-training bugs in AI and reclaim the lead. In an optimistic statement, “We have built enough strength… to weather great models shipping elsewhere.” Recently, the company made its play in India’s growing market conditions with free access to the annual subscription of ChatGPT Go, competing with the Jio-Google AI Pro partnership deal.
