Sam Altman has admitted in an internal memo published by The Information that Google is catching up technologically with Gemini 3. That’s a real problem for OpenAI, but OpenAI’s real concern isn’t that. It’s just that he needs the party to last long enough to give him time to build his own infrastructure.
Why is it important. OpenAI plans to burn more than $100 billion in the coming years pursuing AGI. But it is completely dependent on Microsoft for servers, NVIDIA for chips, and external investors for financing.
Google, on the other hand, already has its own TPUs and generates 70 billion in free cash flow per year thanks to Search, YouTube and Google Cloud.
If the music stops early, one survives and the other doesn’t.
The paradox of timing. OpenAI faces a very peculiar race against time:
- If investment in AI slows in 2026 or 2027, it will have spent tens of billions but will not have completed its own infrastructure. You will remain tied to expensive suppliers. You will not be able to compete on costs with Google. Staying halfway is the worst possible scenario.
- Instead, if the bubble lasts until 2030 or beyond, OpenAI will probably have reached the threshold of self-sufficiency. It will have its own chips, its own data centers, economies of scale. It will be able to survive even when the investment tap is turned off.
It’s like building a bridge: it doesn’t matter how much you’ve spent a lot. If you only get halfway, it’s of no use.
The absence of moat. OpenAI cannot protect itself with sustainable technological advantage. In AI there are no defensive moats (moats) real. Every time OpenAI or any other lab makes a breakthrough, the rest replicate it within months.
The only sustainable advantage OpenAI has left is cost. If you control your infrastructure, you can offer prices that no one else can match. If you do not control it, you become a dispensable intermediary between the end customer and whoever does have the chips and servers.
The context of the memo. The document published by The Information reveals that Altman anticipated turbulence after the launch of Gemini 3. Google’s new model stands out precisely in the areas that generate the most revenue for OpenAI: automation of web design and programming.
Altman acknowledged to his team that “Google has been doing an excellent job lately” and warned that he expects “the environment to be tough for a while.” But he urged them to stay focused on “achieving superintelligence”, admitting this would mean being left “temporarily behind in the current regime”.
The figures. OpenAI went from almost non-existent revenue in 2022 to projecting 13 billion this year. It is one of the fastest business growth in history. But it plans to earn 200 billion in 2030. To achieve this, it will need to multiply its current income by 13 in less than five years.
Meanwhile, it plans to spend $90 billion on R&D alone through 2030. That represents 45% of its projected revenue. Large technology companies allocate between 15% and 30% of their gross profit to research, not their total income. If OpenAI falls short of its billing goal, that percentage will be even higher.
Yes, but. Google has structural advantages that are difficult to overcome:
- Generates a huge cash flow thanks to consolidated and very profitable products.
- You can afford to burn money on AI for years without too much trouble.
- And it already has its own infrastructure after a decade developing TPUs.
OpenAI, on the other hand, lives off external funding. His recent agreement with Oracle to design data center components in the United States is an attempt to build that self-sufficiency. Altman presented it as “a step to ensure that the core technologies of the AI era are built here.”
At stake. OpenAI’s technological advantage over rivals such as Google and Anthropic has narrowed. Investors have sunk more than $60 billion into OpenAI, recently valuing it at $500 billion, betting that it will continue to dominate the market for AI that creates content and reasons like humans. That bet falters.
Anthropic, founded four years ago by former OpenAI employees, is skyrocketing its valuation and aiming to generate more revenue than its former home selling AI to developers and companies. Their models specialize in generating computer code. And ChatGPT is still far ahead of Gemini in usage and revenue, but the gap is narrowing.
Between the lines. Altman concluded his memo by acknowledging the pressure: “It sucks that we have to do so many hard things at the same time: the best research lab, the best AI infrastructure company, and the best AI platform/product company. But it’s our destiny in life. And I wouldn’t trade positions with any other company.”
The question is not whether OpenAI can technically compete with Google. It’s whether you can hold on financially long enough to stop depending on others.
Featured image | Xataka
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