ESPN's Adam Schefter reported a source said Darnold "has a very fair shot" of beating out Teddy Bridgewater and Josh McCown to start Week 1.
The Jets believe Darnold is closer to being ready to start than they expected when opening camp, and his performance in the preseason will be key to determining the outcome of the battle.
Darnold missed the first three days of camp as the two sides haggled over the language in his rookie contract.
Bridgewater and McCown were seen as favorites over Darnold coming into camp because they're veterans; McCown, in particular, had success last season starting in New York. Bridgewater was the Minnesota Vikings' franchise quarterback before a catastrophic knee injury changed the trajectory of his career.
Darnold is seen as the future in New York but was turnover prone at times at USC, and the Jets have time to wait. They're not seen as a playoff contender this season, and it may be better for Darnold's long-term development if he sat, watched and was not taking a ton of hits in the pocket.
Darnold told reporters:
"Competition is awesome. When I went through it at SC, it was really cool to come out here and compete every single day because that is what this sport is about. I think it also pushes guys on the team when they are seeing a vet like Josh, a vet like Teddy and me coming in and competing really hard.
"I think it pushes everyone. There are guys at other positions that are competing for jobs as well. It is just really awesome to be able to come out here in this competitive environment and just compete. I think that is the name of the game out here, especially in camp. Once guys' legs start to get a little bit tired, competition I think pushes all of us to be better."
Once Darnold got into camp, this was the expected outcome. He may have started a little behind the other two, but the 21-year-old undoubtedly has the highest ceiling of the three. Him hitting throws the others might not be able to in practice isn't a surprise; doing it in game situations is another question entirely.
The Jets will probably spend most of the preseason with a wide-open battle, with the winner being determined by how they fare in game action. They open the preseason Friday against the Atlanta Falcons.