ChatGPT maker OpenAI was dealt a one-two punch on Tuesday, in a pair of separate blows that could undermine the firm’s dominance in the AI field.
First, as The Economist reports, Microsoft and Nvidia announced that they had signed a $350 billion deal with competitor Anthropic, “strategic partnerships” that almost doubled the latter company’s September valuation.
Then, Google came in with the kill by releasing Gemini 3, its latest and “most intelligent model” that impressed in early tests, especially when compared to OpenAI’s latest GPT-5.1 model, which debuted just last week.
In short, OpenAI’s grip looks shakier than ever — despite the firm’s meteoric rise to fame following the advent of ChatGPT almost exactly three years ago.
Complicating matters is a skittish market. Concerns over a growing AI bubble sparked a major tech selloff earlier this month, with analysts balking at an enormous and growing gulf between astronomical valuations and relatively tiny revenues.
While Nvidia’s posting of better-than-expected revenues on Wednesday reignited investor enthusiasm, nobody knows how the story will end.
“There has been a lot of talk about an AI bubble,” a boisterous Nvidia CEO Jensen Huang told investors. “From our vantage point, we see something very different.”
Now that Nvidia has signed up to hook Anthropic up with its AI hardware for the first time, and Google is making measurable progress with its latest Gemini 3 model, the pressure on OpenAI — once the de facto AI product, especially for curious amateurs — is mounting.
Of particular concern for OpenAI CEO Sam Altman: the usership gap is continuing to shrink. Google says its Gemini app has 650 million monthly active users, while Altman claimed last month that ChatGPT hit 800 million weekly users.
As The Economist points out, OpenAI’s plan appears to be doubling down by spending even more cash. It’s already planning to spend north of $1.4 trillion on data center buildouts over the next couple of years — and it’s still burning through billions of dollars each quarter.
That strategy could spread uncertainty from Wall Street to private markets, making it even harder to justify sky-high valuations in light of some steep competition putting a damper on potential revenue.
Nobody knows what all of the pressure on OpenAI will amount to. Some expect Anthropic — and particularly Google — to continue undermining the company’s dominance.
“We’re in a situation where — because of Google’s size and space and their first-mover advantage in search — Gemini could take market share and cause OpenAI and others to fall behind,” JonesTrading chief market strategist Mike O’Rourke told the New York Times.
Others are convinced that the gauntlet has already been thrown.
“OpenAI has basically squandered the technical lead it once had; Google has caught up,” noted AI skeptic Gary Marcus wrote in a recent blog post.
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