Sam Altman admits Google’s AI progress is creating ‘economic headwinds’

OpenAI CEO Sam Altman has acknowledged that Google’s latest advances in artificial intelligence could create ‘temporary economic headwinds’ for the company. The comments were made in an internal memo sent to employees.

The memo was written shortly before Google launched Gemini 3 on 18 November, which the company described as its “most intelligent model yet”. Early feedback from developers shows Gemini 3 performing strongly in website design, coding, and other tasks that bring in major revenue for OpenAI.

Competition rises as ChatGPT engagement cools

OpenAI is facing pressure on more than one front. According to the company’s chief financial officer Sarah Friar, ChatGPT has seen a dip in user engagement in recent months. She said during a quarterly earnings call that the slowdown began after OpenAI introduced new content restrictions in August to limit unsafe responses.

Despite the softer engagement, the company is on track to meet its 2025 revenue target of $13 billion, as per the same report. However, OpenAI is also spending heavily, with internal estimates suggesting an annual burn rate of around $8.5 billion.

Google’s position in the AI race is strengthened by its financial scale. The company, valued at around $3.6 trillion, has generated over $70 billion in free cash flow in the past year. A share of that comes from providing cloud services not only to its own AI projects but also to OpenAI and competitors such as Anthropic.

Google’s ‘full-stack advantage’ raises pressure on rivals

Analysts say Google currently benefits from what they call a “full-stack advantage”. The company controls its entire AI pipeline from research and custom chips to cloud hosting and products used by millions each day.

Gemini 3 was integrated immediately into Google Search, the Gemini app, and tools used by more than 650 million monthly users. This gives Google a faster route to scale compared to companies like OpenAI, which depend on external partners for computing infrastructure.

In his memo, Altman encouraged employees to stay focused on long-term goals.

He wrote:

“We have built enough strength as a company to weather great models shipping elsewhere.”

He added that most of OpenAI’s research team is now focused on reaching what he calls “superintelligence”, and admitted that the company is handling several difficult tasks at once from research to infrastructure to product development.

Altman ended the message on a determined note:

“I wouldn’t trade positions with any other company.”

OpenAI pushes ahead

The memo highlights the growing intensity of the global AI race, with OpenAI, Google, Microsoft, and Anthropic all competing to build more capable models. While Google may have gained momentum with Gemini 3, Altman’s message suggests that OpenAI believes it still has a strong position which is supported by rapid research progress and high global demand.