"The market is as competitive as I have ever seen it." That's how OpenAI's chief revenue officer Denise Dresser opened a four-page memo sent to company employees on Sunday, warning staff that the company needs to work harder to retain users and build a defensible enterprise business.
The Verge obtained and reviewed the memo. Its central argument: switching between AI tools is too easy, and OpenAI needs to build products that make users want to stay. The memo uses the word "moat" repeatedly - the idea that OpenAI needs features, integrations, and workflows that competitors can't simply replicate.
The urgency is notable. OpenAI currently claims more than 400 million weekly active users of ChatGPT and has raised over $40 billion in total funding. But the memo signals that revenue leadership doesn't believe the company's market position is secure. Claude from Anthropic has made real inroads with enterprise customers, Google's Gemini is bundled into Workspace products used by billions of people, and open-source models have narrowed the performance gap enough that price-sensitive buyers can now build competitive applications without paying OpenAI at all.
Enterprise Stickiness Is the Actual Strategy
The enterprise focus in the memo makes sense as a retention play: business contracts are stickier than individual subscriptions. A company that builds internal workflows on top of OpenAI's API doesn't switch vendors easily - the switching cost is months of re-engineering, not a canceled $20-a-month plan.
What the memo doesn't reveal is whether OpenAI has a specific product plan to address this. A memo about building moats is not the same as having one. The company's main competitive moves this year have largely been pricing - dropping the ChatGPT Pro plan for students and making deeper-context models available at lower tiers. Whether that's enough to lock in enterprise contracts against the likes of Microsoft, which both partners with and competes against OpenAI through its own Copilot products, is not settled.
Dresser's candor with employees is unusual. Most executives prefer internal optimism. The fact that a CRO is circulating a frank assessment of competitive pressure suggests either a culture of transparency or a recognition that the situation is visible enough that pretending otherwise would backfire.