Tech Brew Ride Home - Sam Altman Declares A “Code Red”

Episode Date: December 2, 2025

Sam Altman declares a “Code Red” for OpenAI. All hands on deck. Molly, you in danger, girl, to quote Oda Mae Brown from the movie Ghost. Long term, is Apple in trouble cause of Google’s ascendency in AI? Samsung announces but does not launch a tri-fold phone. And Ben Thompson weighs in on the obsession of the day. OpenAI CEO Declares ‘Code Red’ to Combat Threats to ChatGPT, Delays Ads Effort (The Information) Apple AI Chief John Giannandrea Retiring After Siri Delays (MacRumors) Samsung’s Z TriFold is official and it looks like a tablet with a phone attached (The Verge) Google, Nvidia, and OpenAI (Stratechery) Learn more about your ad choices. Visit megaphone.fm/adchoices

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with a custom color Xbox wireless controller. Learn more at Windows.com slash student offer. While supplies last, ends June 30th, turns at AKA.m.m.S. slash college PC. Welcome to the Tech Brew Ride Home for Tuesday, December 2nd, 2025. I'm Brian McCullough today. Sam Altman declares a code red for open AI. All hands on deck. Molly, you in danger girl, to quote Otame Brown from the movie Ghost.

Long term is Apple in trouble because of Google's ascendancy and AI. Samsung announces but does not launch a trifold phone, and Ben Thompson weighs in on the obsession of the day. Here's what you miss today in the world of tech. Conducting business online can feel a little scary these days, especially with AI creating new opportunities for fraud. In fact, Salent estimates that AI was behind roughly 20% of the fraud perpetrated in 2024. Spotting bad agentic AI while allowing good agents to continue with their tasks isn't easy.

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That's mimoto.aI slash ride home. Sam Altman has declared a code red to shift more resources to improve chat chp-t amid rising competition that we've been discussing, also delaying OpenAI's other plans like introducing ads. Coding the information. We are at a critical time for chat GPT, he said in an internal memo. Open AI hasn't publicly acknowledged it is working on selling ads, but it is testing different types of ads, including those related to online shopping, according to a person with knowledge of its plans. Millions of people already use ChatGPT to search for products to buy. Altman said the code read surge to improve ChatGPT meant OpenAI would also delay progress with other products such as

AI agents, which aim to automate tasks related to shopping and health and Pulse. which generates personalized reports for chat chbt users to read each morning. He didn't specify what was going wrong with chat GPT, but Google said this fall that its Gemini chatbot had gained ground in terms of usage. Altman recently warned employees privately that Google's AI resurgence could cause temporary economic headwinds for OpenAI. In a call with OpenAI investors last month, CFO Sarah Fryer alluded to a slowdown in chat GPT growth, though it wasn't clear what growth metric she was referring to, according to a person with knowledge of her remarks.

OpenAI's Code Red represents a role reversal from three years ago when Google began its own code red to respond to the threat ChatGPT posed to Google's search. Google later launched its Gemini chatbot, which still lags OpenAI in terms of user numbers, but there are signs it may be catching up. Google said in October that Gemini has 650 million monthly active users up from 450 million monthly active users in July, though it's still a far cry from the user figures OpenAI has disclosed for ChatGPT, end quote. know, just a personal anecdote here, take it or leave it. I've been getting tons of, we're busy, try again later notifications when I attempt to do deep research on Gemini the last couple of days, maybe indicative of the surge and usage they're seeing. I kind of expect Google to come out soon with some sort of statement about usage in order to keep the pressure on Open AI if indeed they are seeing a surge. But at the same time, I wouldn't be surprised at all if OpenAI announced

something completely unexpected by the end of the year in an attempt to kind of seize the initiative back. They kind of have to. Apple says AI chief John Giannandreya is stepping down and will retire in the spring of 2026. X Microsoft CVP Amar Subramanya is taking over reporting to Craig Federigi, quoting Mac rumors. Subramanya was previously corporate vice president of AI at Microsoft, and before that, he spent 16 years at Google. He would is head of engineering for Google's Gemini assistant, and Apple says that he has deep expertise in both AI and ML research that will be important to quote Apple's ongoing innovation and future Apple intelligence features. Apple CEO Tim Cook thanked to Gianendra for his role advancing Apple's

AI work and said that he looks forward to working with Subramania. He also said that Federigi has played an important role in Apple's AI efforts. Apple said that it is, quote, poised to accelerate its work in delivering intelligent, trusted, and profoundly personal experiences with the new AI team, end quote. Another aside here with some thoughts, Apple has been rewarded in a way, at least by Wall Street, for being a bit behind in AI, at least so far. Their stock is at an all-time high. But I wonder, the holy grail for Apple with AI is sort of the ultimate user lock-in, right? If you integrate AI into the phone and then users start using it daily, hourly for everything in their lives, well, let's say Google does come out.

and say, whoa, hundreds of millions of people are now using Gemini every day, and they're integrating it with their Gmail, their docs, their calendar, etc. And then they start making the pitch, you know, if you came over to Android or better a pixel phone, you can integrate all of your Gemini stuff more easily. That would be a compelling reason for people to switch away from iOS. The first really compelling reason for years, if I'm being honest, if Gemini becomes integral to people's daily lives, that could start putting pressure on Apple in a big way.

To paraphrase the onion, screw it. We're doing three folds. Samsung has unveiled the Galaxy Z trifold with a 6.5 inch outer screen, a 10-inch inner screen, a Snapdragon 8 Elite for a Galaxy system on a chip, and a 3.9 millimeter body at its thinnest point, quoting the verge. The Trifold's inner screen measures 10 inches on the diagonal

with a 2160 by 1584 resolution and a 120 hertz adaptive refresh rate that goes all the way down to 1 hertz. That's a lot of screen. You can run three apps vertically side by side on it and even use Samsung's Dex desktop environment in a standalone mode without a separate display. On paper, the Trifold's outer screen looks a lot like the one on the Z Fold 7. It's a 6.5 inch 1080P display with a 21 by 9 aspect ratio. Each of the tri-folds three panels has a slightly different thickness. The center panel is the thickest at 4.2 millimeters, and it houses a USBC port on the bottom edge. The thinnest panel measures just 3.9 millimeters thick, including a physical sim tray,

and the other panel is 4 millimeters thick. Those two sides fold inward over the center panel, unlike Huawei's Matexte, which folds in a Z-shaped and uses part of the inner screen when folded. Samsung says that the main display undergoes a 200,000 cycle multi-folding test, equivalent to folding the device approximately 100 times a day for five years. The tri-fold measures 12.9 millimeters thick when it's folded, 4.7 millimeters thicker than a Samsung Galaxy S-25 Ultra. It's also thicker than a Z-Fold 7, which is 8.9 millimeters when you fold it, but it's not

too far off the previous Z-Fold 6, which is 12.1 millimeters when folded. Although it folds differently, the Z-Trifold is pretty close in size and way. to Huawei's Matexte and most recent XT's. The Z-T trifold is just a little thicker when folded, 12.9 millimeters versus 12.8 millimeters, and weighs 309 grams compared to the 298 gram XT. With all that's going on inside the trifold, Samsung has still managed to squeeze in three rear cameras,

a 200-mepixel wide angle, a 12-migixel ultra-wide, and a 10-mapsal 3X telephoto. Both the cover screen and the inner screen include a 10-mixel selfie camera as well. Each of the phones, panels, houses, a battery as well, adding up to a 5,600-m-a-amp hour capacity. The whole thing is powered by a Snapdragon 8 Elite for Galaxy chipset, like the S-25 series, and includes 16 gigabytes of RAM. One thing I'm not seeing on the Trifold spec sheet, S-pen compatibility. Samsung spokesperson

Elise Sembock confirmed to the verge over email that the TriFold lacks support for the company's Bluetooth stylus. The Z-Fold used to include stylus support, but that ended with the most recent Z-fold seven. It'll launch first in South Korea on December 12th with a U.S. launch plan for the first quarter of 2026. There's no U.S. price just yet, but it'll cost about $2,500 when you convert for Korean currency for the 512 gigabytes of storage when it launches back home, so you should probably start saving your pennies and nickels for this one, end quote. Odd that they pre-announce this without doing an event. Peak pollination season, and my business is scaling fast. To keep the nectar flowing flowing,

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celebrating its 40th anniversary. UN must be 21 to enter. Finally today, back to the obsession of the moment. The whole is Google Ahead in AI thing is sort of like crack for me. I love big strategic horse race tech stuff, as I guess you've noticed over the years. Who's up, who's down, who's screwing up? What is the play here if you want to kill the competition or catch up?

You know who else loves that stuff? Ben Thompson. Well, Ben has weighed in on all of this, quoting Streetechery. The heroes of the AI story over the last three years have been two companies, Open AI and Nvidia. The first is a startup called with the release of ChatGPT to be the next great consumer tech company. The other was best known as a gaming chip company characterized by boom and bus cycles, driven by their visionary and endlessly optimistic founder, transformed into the most essential infrastructure provider for the AI revolution.

Over the last two weeks, however, both have entered the proverbial hero's journey cave and are facing their greatest ordeal. The Google Empire is very much striking back. Gemini III's recent success initially seemed like good news for Nvidia. That analysis, however, missed one important point. What if Google sold its TPUs as an alternative to Nvidia? That's exactly what the search giant is doing. First, with a deal with Anthropic, then a rumor deal with meta, and third with the second wave of neoclouds,

many of which started as crypto miners and are leveraging their access to power to move into AI. Suddenly, it is Nvidia that is in the crosshairs with fresh questions about their long-term growth, particularly at their sky-high margins if there were, in fact, a legitimate competitor to their chips. This does, needless to say, raise the pressure on Open AI's next pre-training run on Nvidia's black Blackwell chips. The base model still matters and Open AI needs a better one, and NVIDIA needs evidence one can be created on their chips. What is interesting to consider is which company is more at risk from Google and why. On one hand, NVIDIA is making tons of money, but if Blackwell is good, Vera Rubin promises to be even better. Moreover, while Meta might

be a natural Google partner, the other hyperscalers are not. Open AI, meanwhile, is losing more money than ever and is spread thinner than ever, even as the startup agrees. to buy ever more compute with revenue that doesn't yet exist. And yet despite all that, and while still being quite bullish on Nvidia, I still like OpenAI's chances more. Indeed, if anything, my biggest concern is that I seem to like Open AI's chances better than Open AI itself. If you go back a year or two, you might make the case that Nvidia had three modes relative to TPUs, superior performance, significantly more flexibility due to GPUs being more general purpose than TPUs and Kuda, and the Associated.

and the associated developer ecosystem surrounding it. OpenAI, meanwhile, had the best model, extensive usage of their API, and the massive number of consumers using chat GPT. The question then is what happens if the first differentiator for each company goes away? That, in a nutshell, is the question that has been raised over the last two weeks.

Does Nvidia preserve its advantages if TPUs are as good as GPUs, and is OpenAI viable in the long run if they don't have the unquestioned best model? Kuda, meanwhile, has long been a critical source of NVIDIA lock-in, both because of the low-level access it gives developers and also because there is developer network effect. You're just more likely to be able to hire low-level engineers if your stack is on NVIDIA. The challenge for NVIDIA, however, is that the big company effect could play out with

Kuda in the opposite way to the flexibility argument. While big companies like the hyperscalers have diversity of workloads to benefit from the flexibility of GPUs, they also have the wherewithal to build an alternative software stack. that they did not do so for a long time is a function of it simply not being worth the time and trouble. When capital expenditure plans reach the hundreds of billions of dollars, however, what is worth the time and trouble changes. ChatGPT, in contrast to Nvidia, sells into two much larger markets. The first is developers using their API, and according to Open AI anyways, this market is much stickier and reticent to change. Which makes sense. Developers using a particular model's API are seeking

to make a good product, and while everyone talks about the importance of avoiding lock-in, most companies are going to see more gains from building on and expanding from what they already know, and for a lot of companies, that is OpenAI. Winning business, one app by one, will be a lot harder for Google than simply making a spreadsheet presentation to the top of a company about upfront costs and total cost of ownership. Still, API costs will matter, and here Google almost certainly has a structural advantage. The biggest market of all, however, is consumer, Google's bread and butter. What makes Google so dominant in search? impervious to both competition and regulation, is that billions of consumers choose to use Google

every day, multiple times a day, in fact. Yes, Google helps this process along with its payments to its friends, but that's downstream from its control of demand, not the driver. At one point, it didn't seem possible to commoditize content more than Google or Facebook did, but that's exactly what LLMs do. The answers are a statistical synthesis of all of the knowledge the model makers can get their hands on and are completely unique to every individual. At the same time, every individual users' usage should, at least in theory, make the model better over time. It follows then that chat GPT should obviously have an advertising model. This isn't just a function of needing to make money. Advertising would make chat GPT a better product. It would have more users using it more,

providing more feedback, capturing purchase signals, not from affiliate links, but from personalized ads, would create a richer understanding of individual users enabling better responses. And as an added bonus, and one that is very pertinent to this article, it would dramatically deepen Open AI's moat. It's not out of the question that Google can win the fight for consumer attention. The company has a clear lead in image and video generation. Google is also obviously capable of monetizing users, even if they haven't turned on ads in Gemini yet, although they have in AI overview. It's also worth pointing out, as Eric Seifert did in a recent Shratertichory interview, that Google started monetizing search less than two years after

its public launch. It is search revenue, far more than venture capital money, that has undergirded all of Google's innovation over the years and is what makes them a behemoth today. In that light, OpenAI's refusal to launch and iterate on ads as a product for a chat GPT, now three years old, is a dereliction of business duty, particularly as the company signs deals for over a trillion dollars of compute. And on the flip side, it means that Google has the resources to take on Chat CPT's consumer lead with a World War I-style war of attrition. Opening Eye's lead should be unassailable, but the company's insistence on monetizing solely via subscription, with a degraded user experience for most users and price elasticity challenges in terms of revenue

maximization is very much opening up the door to a company that actually cares about making money. To put it another way, the long-term threat to Nvidia from TPUs is margin dilution. The challenge of physical products is that you do have to actually charge the people who buy them, which invites potentially unfavorable comparisons to cheaper alternatives, particularly as buyers get bigger and more price sensitive. The reason to be more optimistic about OpenAI is that an advertising model flips this on its head. Because users don't pay, there is no ceiling to how much you can make from them, which by extension means that the bigger you get, the better your margins have the potential to be,

and thus the total size of your investments. Again, however, the problem is that the advertising model doesn't exist for OpenAI yet. I understand why the market is freaking out about Google. Their structural advantages in everything from monetization to data to infrastructure to R&D is so substantial that you understand why OpenAI's founding was motivated by the fear of Google winning AI. It's very easy to imagine an outcome where Google's inputs simply matter more than anything else. Google already has done this once. Search was the ultimate example of a company winning an open market with nothing more than a better product.

Aggregators win new markets by being better. The open question now is whether one that has already reached scale can be dethroned by the overwhelming application of resources, end quote. So I am obsessed with Pluribus, the TV show that's on Apple TV, like obsessed.