What Drove OpenAI’s ‘Code Red’ for ChatGPT
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What investors expect ahead of the Federal Reserve's decision on interest rates tomorrow. Plus, why OpenAI declared a code red to focus on chat GPT and what that means for its future.
It feels like just the conversation around AI chatbots has suddenly said, hey, Google, and that's been a real challenge for the company.
And President Trump says Ukraine is losing and that the country should accept a U.S. peace plan. It's Tuesday, December 9th. I'm Alex Oselev for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. Today, Federal Reserve officials gathered for their final two-day rate-setting meeting of the year. They won't announce their decision until tomorrow, but they're expected to cut rates by a quarter point, though as many as half the policymakers have signaled that they oppose a cut. Officials have been unusually divided over whether a weaker jobs market or worsening inflation would be harder to fix if the Fed makes the wrong choice now.
Some outside the Fed think that a quarter-point rate cut doesn't go far enough, including President Trump. Another of those people is Kevin Hassett, the director of the White House National Economic Council, who is widely believed to be Trump's pick to take over as Fed chair next year. Here's Hassett speaking this morning at the WSJ CEO Council Summit. Journalist Poppy Harlow asked him whether he'd substantially lower interest rates if he became the Fed chair.
If the data suggests that we could do it, then like right now, I think there's plenty of room to do it.
Plenty of room, which plenty is more than 25 points. Correct. Okay.
Hassett says he would rely on his own judgment if he were the Fed chair and not bow to political pressure when deciding on policy.
So the loyalty, if you're Fed chair, would be to what the president wants or to your economic independent judgment.
Yeah, to my judgment, which I think the president trusts, and a firm commitment to not be partisan, and I worry that the Fed has been partisan.
But tomorrow, investors expect the Fed to signal caution about cutting rates further in 2026. And in today's trading, major U.S. indexes were mixed. The Nasdaq and the S&P were almost unchanged, while the Dow fell 0.4%. The worst performer in the Dow was JPMorgan Chase, whose share slid 4.7% after an executive predicted higher expenses next year. It was the steepest decline in the bank's shares since April. In commodities trading, silver prices closed above $60 a troy ounce for the first time. Its gains have outpaced gold this year, making silver the hottest commodity of 2025. OpenAI is the world's most valuable startup, and it's got a lot going on. Besides its popular chat GPT chatbot, it's got the image generator DALI and the text-to-video product Sora.
It's also working towards artificial general intelligence, broadly defined as being able to outthink humans at almost all tasks. But last week, CEO Sam Altman put out a memo declaring a code red effort to improve the quality of chat GPT and pushing for a pause on other projects. I'm joined now by Sam Schechner, who covers tech for The Journal. Sam, what triggered this decision for OpenAI and what changes is it making now?
What prompted OpenAI to declare a 'code red' for ChatGPT?
The most direct cause of this code red has been the immediate threat from Google. Last month, the release of Gemini 3, its new model, blew past OpenAI on a closely watched third-party leaderboard of AI tools.
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