This Week in AI: Google's New AI Putting Pressure on ChatGPT

Competition in the AI industry has taken a turn in recently, with Google's Gemini 3 release surprising many tech enthusiasts by being a significant upgrade over its previous version. Google announced Gemini 3 with relatively little fanfare, putting out a blog post just before Thanksgiving talking about how its next AI was performing particularly well with prompts around "vibe coding."

The real indicator something more was happening came from OpenAI, where ChatGPT helped kick off the AI race and whose CEO Sam Altman said to staff that pressure from competitors was ramping up. Now, he’s reportedly flashing warning signs with a memo the Information and Wall Street Journal said declared a "code red" internally.

"We are at a critical time for ChatGPT," he said in the memo, according to The Information. The publication added that OpenAI had earlier indicated a slowdown in growth to some investors.

To be sure, Google's Gemini has always been impressive, offering many of the same features and capabilities that OpenAI built into ChatGPT. But despite Google being an AI leader for many years, there’s been a sense that the tech giant fell behind the AI race as startups like OpenAI, Anthropic and DeepSeek focused on features such as advanced mathematics and coding.

Google's Gemini, meanwhile, was particularly good at things like generated video. Google's Veo 3, released earlier this year, has already helped power many viral videos that once were thought impossible without the help of big budget studios. Among them, video blogs from fictional characters such as Stormtroopers from Star Wars, or Big Foot and Yeti camping in the woods.

Now, Google says that on top of all those capabilities, its Gemini has improved coding as well.

While Google's success may push more advancements at OpenAI, all of this is happening at a time when investors increasingly are asking where profits are in the AI race. The stock market has been swinging on AI hopes and fears, in part because investors are still unsure whether anyone other than NVIDIA, Microsoft, Amazon, Oracle, and other hardware makers will actually see significant gains.

Google needs more computing power for AI

In the seemingly nonstop debate about AI’s sustainability, one data point experts are watching is how much investment is being made into hardware. When it comes to Google, the answer seems to be significant.

Google's infrastructure boss reportedly told employees the company must double its AI serving capabilities every six months to meet demand, according to CNBC, which cited a copy of an internal company presentation. "The competition in AI infrastructure is the most critical and also the most expensive part of the AI race," Amin Vahdat, a vice president at Google Cloud, reportedly said at the meeting. "Now we must double every 6 months ... the next 100x in 4-5 years."

The data out of Google isn’t a guaranteed bet on AI's future, though it is another indicator of just how much computing power these companies are using. Industry experts might ask how much of that demand is coming from real AI products with customers behind them and how much instead may be startups and companies testing new technologies they may ultimately abandon. Regardless, Microsoft, Amazon, Meta and Google alone are expected to collectively spend more than $380 billion on capital expenditures, such as new data centers, this year.

Memory market upended

Chipmaker Micron said it will stop selling memory technology directly to consumers, switching to provide memory for high-powered AI chips instead. The company said it made "the difficult decision to exit the Crucial consumer business in order to improve supply and support for our larger strategic customers in faster-growing segments," in a statement this week.

The move comes as the tech industry is increasingly struggling with a global shortage of memory chips, leading to price and supply pressure. Crucial had made memory chips and storage drives. Other chipmakers include SK Hynix and Samsung, CNBC notes, though Micron had been the only US-based memory supplier.

ChatGPT for shopping

Just in time for the holidays, OpenAI has announced a shopping function that helps people research and identify products they might want. The tool is designed to simplify the process of researching products, using ChatGPT's well-regarded capability to crunch through large amounts of data and information.

Shopping has stood out as one of the more interesting uses for AI as startups search for different ways to apply the technology's reasoning powers to our daily lives. Earlier this year, Google announced an AI function for its flights deals tool, asking what you want to do (rock climbing? ice fishing? opera?) and then providing a list of deals to relevant places.

In ChatGPT's case, the way it works is that you merely pick "shopping research" from the app's list of functions and describe what you're after. "You’ll explain what you’re looking for, and answer clarifying questions about things like your budget, who the item is for, or which features you care about," OpenAI said. The company did warn though that while its tool may appear to do a good job, it "might make mistakes about product details like price and availability" and that users should double-check its work.

ChatGPT's expansion into gift shopping may be a next logical extension, but there are questions about how this will work. Advertising experts who built their careers learning how to get to the top-selling and recommended lists on Google and Amazon are now having to re-orient the way they work to count for how an AI might recommend products.

 

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Ian Sherr is a widely published journalist who's covered nearly every major tech company from Apple to Netflix, Facebook, Google, Microsoft, and more for CBS News, The Wall Street Journal, Reuters, and CNET.