OpenAI CEO Sam Altman has addressed employees in an internal memo, acknowledging that recent advancements by rivals like Google could create short-term challenges for the company, but reaffirming confidence in OpenAI’s long-term position in the AI race.

Altman wrote that Google’s AI progress might "create some temporary economic headwinds for our company."

However, he emphasised that OpenAI is "catching up fast" and expects to emerge as the leader in artificial intelligence, even as competition heats up. The memo was drafted before Google released its Gemini 3 model, which the company has described as its most capable AI yet. Early reports indicate Gemini 3 performs well in automating website and product design, as well as generating code—a lucrative segment for AI firms, including OpenAI and competitors such as Anthropic.

Concerns over OpenAI’s growth surfaced earlier this year. During a recent quarterly earnings call, CFO Sarah Friar noted that user engagement with ChatGPT had cooled, despite the company’s overall positive financial performance.

Altman’s memo highlighted the growing competition in the AI sector. He observed that "competitors such as Google and Anthropic are narrowing the gap in the AI race." While Anthropic’s Claude model can generate computer code from conversational prompts, Google has integrated its Gemini AI into search, productivity tools, and other services. OpenAI recently responded with Codex, which also tackles coding tasks efficiently.

The memo also touched on economic considerations. OpenAI, now a for-profit entity valued around $500 billion, is expected to generate approximately $13 billion in revenue, but has invested roughly $100 billion in pursuit of superintelligence. In comparison, Google’s market value is around $3.5 trillion, with over $70 billion in free cash flow in the past year, partly from cloud services provided to OpenAI, Anthropic, and other AI companies.

Despite the competitive landscape, Altman encouraged employees to remain focused and confident. "We have built enough strength as a company to weather great models shipping elsewhere competition... (so), having most of our research team focused on really getting to superintelligence is critically important," he wrote. He added, "It s***ks that we have to do so many hard things at the same time AI infrastructure company, and the best AI platform/product company I wouldn't trade positions with any other company," underscoring the challenges and opportunities facing OpenAI.

On the infrastructure front, OpenAI has partnered with Apple’s largest supplier, Foxconn, to develop AI data-centre components in the US. Altman noted that this collaboration could strengthen domestic manufacturing capabilities. "This partnership is a step toward ensuring the core technologies of the AI era are built here [US]," he said, adding that AI infrastructure production presents a "generational opportunity to reindustrialise America."