ChatGPT's 'Code Red' Is an Overreaction

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00:00Sam Altman's Code Red for ChatGPT seems like a bit of an overreaction.

00:04Did you order the Code Red?

00:05You're a goddamn red, I did!

00:07In an internal memo cited by the information,

00:10Altman said that OpenAI was going to pause other work

00:12to focus on improving its main product.

00:15He seems particularly worried about Google,

00:17which just released a new version of its chatbot Gemini.

00:20And Gemini 3 is kind of crushing it.

00:22Salesforce CEO Mark Benioff called it insane

00:25and said that he would be switching from ChatGPT permanently.

00:29Gemini 3 also surged ahead of other competitors in industry benchmark tests.

00:34It's been called the most capable AI chatbot.

00:37But ChatGPT is still by far the most popular.

00:40In October, Gemini's web-based version got 153 million visits,

00:45while ChatGPT got 1.1 billion.

00:48That same data also shows that ChatGPT has been growing faster than Gemini.

00:53The reality is that Gemini is a respectable second,

00:56but it probably won't surpass ChatGPT in market share.

01:00And there's a few reasons for that.

01:01ChatGPT has first-mover advantage and huge brand recognition.

01:0510% of the world's population use it every month.

01:08Google, on the other hand, has struggled in the past

01:11to reach those kinds of stratospheric user numbers with a new service.

01:15Just look at its failed attempt to move into social media with Google+.

01:19And have you even heard of Google Wave or Google Buzz?

01:23On top of that, the company's AI chief is Demis Hissabas,

01:26a former neuroscientist and Nobel Prize winner.

01:29And he tends to prioritize scientific achievement over product engagement.

01:34Altman is totally different.

01:35He lives and breathes the Silicon Valley blitzscaling mantra.

01:39Iterate on the fly, release new features, experiment, and dominate the market.

01:43That's why he's made ChatGPT so complimentary.

01:47And now he's adding more personality to the bot,

01:50making it more friendly and warm and engaging,

01:53even adding erotic content to try and keep people coming back.

01:57So while Google is betting on being smarter,

02:00OpenAI is gambling on being a friendly companion,

02:03one that's engaging and harder to quit.

02:05For better or worse, that approach has worked well for other Silicon Valley companies.

02:10And I think that makes OpenAI's odds pretty good.