OpenAI has declared a "code red" as Google threatens to unseat the AI industry's early leader, according to the Wall Street Journal. Technology journalist Jacob Ward joins CBS News to discuss.

California

OpenAI has declared a 'code red' following the launch of Google's AI model Gemini, which has led to a significant increase in Google's user base and industry support. OpenAI CEO Sam Altman has instructed employees to focus on enhancing ChatGPT, sidelining other projects to address the competitive threat posed by Gemini.

Despite being an early leader in the AI industry, OpenAI faces challenges in profitability and infrastructure costs, while Google continues to grow its AI offerings and user engagement. Meanwhile, Apple is taking a cautious approach, leveraging its strong financial position to wait for the best AI technology before entering the market.

OpenAI declares 'code red' as Google threatens its AI lead, WSJ reports

open AI declaring code red as the AI race intensifies, and Google threatens to unseat the industry's early leader. According to a report from the Wall Street Journal, Open AI CEO Sam Altman told employees, the company must focus on improving chat GPT, pushing all other products to the sideline to address the threat. Last month, Google released an updated version of its AI model called Gemini. Some are calling it the most complex AI model in the world, but it's not the only thing that's changing in the industry. Capable AI model? Yes. Let's bring in Jacob Ward, a technology journalist and host of the Rip Current podcast and author of The Loop, how technology is creating a world without choices and how to fight back. Jacob, always good to see you. So why is open AI declaring a code red? What are the competitive stakes here? Yeah, well, I mean, you can imagine the open AI workers coming back from Thanksgiving thinking they're going to coast right into the holiday. Yeah, no. All of that being blown up when their boss drops this memo on them. Code red sounds like some sort of national emergency. It is not. It is a business emergency for this company. What they're worried about, of course, is, as you mentioned, Gemini is on the ascent. We've seen Google's user base grow up to something like 650 million monthly users after it released this new image generator. They are definitely catching up. And we saw people like Salesforce CEO Mark Benny. I'll say this is the one I'm going to use from now on. It's just so cool. It's so great. And that clearly has open AI panicking because, as you mentioned, they are the early leader. We've been using chat GPT the way we used to use the verb Google. And so now they clearly don't want to be displaced. So what is it about Gemini that's better than chat GPT? What can it do that that the other company can't? Well, so the industry benchmarks are typically things like, you know, you throw it a big stack of trivia or a big stack of medical exam questions. You try and trick it into saying hateful or dangerous things and figure out whether it can steer the conversation back in a more great, you know, a better direction. But, you know, all those industry benchmarks are theoretically what Gemini has now surpassed this chatbot on. But we don't care about that. I mean, you know, we don't care about that. We care about does it write funny jokes, make cool images, and does it save me time? And chat GPT clearly is still going to be able to do that. They just seem to feel that they need to adopt a new or at least a more intense version of their strategy in order to get more of us using it. You know, Google makes billions of dollars a year. Open AI has yet to turn a profit. If money is the issue for open AI, why not focus on something like ad revenue, something we know will make dollars? That's right. I mean, the projections are that open AI can't even turn a profit till probably 2030. They're talking about spending more than a trillion dollars on infrastructure. So how they're going to get there, it's not really clear. But you're right, right? Why wouldn't you just go for advertising? Why wouldn't you do what Google has done, which makes huge money that way? Well, you'll remember like in the early days of Facebook, which nowadays makes all its money off advertising. Mark Zuckerberg was very reluctant to do advertising. He didn't want to mess with the product. He wanted to make the product irresistible first before he began bothering people with advertising. What you hear in both the code red memo language that the Wall Street Journal obtained and in all of the public pronouncements is that what they really want is personalization and emotional attachment. They want chat GPT to be a thing that you just can't help but use on a psychological and emotional level. It feels to me like that is what they're trying to do for all of us is make us so hooked on this product that we can't help but look at the ads when and if they introduce those. So he seems to feel, Sam Altman seems to feel that he needs to go hard at that before he distracts anybody from anything else. Make it as compelling as possible. Make it irresistible. And a lot of these companies seem to be racing ahead when it comes to AI, but not Apple. It's interesting. Right, right, right. And there's a lot of speculation about why that is. But what do you think the strategy is here? Well, with Apple, I mean, you really cannot as a hardware company, you know, you know, as a hardware company that if you make a mistake and then ship everything with a mistake in it, that's a real problem. In software, that's not the problem. Software, you can ship tons and tons and tons of a broken thing and fix it over time. No problem. Apple is in a very careful business as a handset maker, and I think that they probably just don't want to mess with their brand reputation. So while, you know, all of the common wisdom has been saying, oh, they're struggling to keep up and so forth. I don't know. Like, they just feel to me like they're just doing what they do really well. They make gobs of money. They're not hurting for money. No, they're not. And if they partner up maybe with somebody like a Google, right, to get this out there in the future, they're going to be in a position to put it into all of our pockets instantaneously. So I just feel like Apple's one of these companies that doesn't have to rush in the way that a company like OpenAI, which has no clear path to profitability, really has to right now. So Apple's just kind of waiting to see what the best product is and maybe go with them. That's the vibe I get, you know, is why rush? They don't need to. They can sit back on their mountains of cash and just wait it out, and I think that's probably what they're doing. Jacob Ward, thank you so much. So good to see you. Happy holidays. Appreciate it. Thank you. Thanks a lot.

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Moscow

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