OpenAI’s (OPENAI) CEO Sam Altman acknowledged in an internal memo that Google’s recent progress in AI could create “temporary economic headwinds” for his company, The Information reported.
The memo expected the Alphabet (GOOG) (GOOGL) unit’s launch of its Gemini 3 model, suggesting OpenAI’s once-dominant technological lead is narrowing, mainly in the crucial pretraining phase of AI model development where OpenAI has faced challenges.
OpenAI did not immediately respond to a request for comment from Seeking Alpha.
Earlier this week, Google started rolling out its latest AI model, Gemini 3. The new AI model also drew praise from Wall Street analysts. Google also enhanced its recently released AI-powered image generator, Nano Banana, and introduced Nano Banana Pro, built on Gemini 3 Pro.
The competitive pressure highlights a financial disparity between the companies. OpenAI forecasts a cash burn of over $100B in the coming years, while the more profitable Google has more resources to sustain a costly AI race, the report added.
However, in spite of these challenges, Altman assured staff that OpenAI, which is backed by Microsoft (MSFT), would catch up and is focusing on ambitious long-term bets, such as automating AI research, the report noted.