Alphabet closes AI gap: Google secures strong position through AI investments

PNN News Desk:

A year ago, Google was perceived to be lagging in artificial intelligence (AI) competitions. However, the situation has changed. Google’s parent company, Alphabet, has established a strong position in AI, restoring investor confidence.

Following the release of recent earnings reports, Alphabet executives spoke with far more confidence than before. Especially after the launch of the new Gemini 3 model, positive feedback on Google’s AI capabilities has positioned the company strongly against competitors like OpenAI.

Alphabet stated that major AI investments are beginning to impact the company’s overall revenue and growth. In this context, the company is considering nearly doubling capital expenditures in 2026, from $175 billion to $185 billion, with a large portion allocated to AI computing infrastructure.

Google CEO Sundar Pichai said, “Our AI investments and infrastructure are now contributing to growth and revenue across all business sectors.”

Pichai added that the Google Gemini app, competing with OpenAI’s ChatGPT, reached 750 million monthly active users by late December, a significant increase from the previous quarter. User engagement has also risen considerably following Gemini 3’s launch.

AI technology is now integrated into Google Search’s ‘AI Mode’ and enterprise versions. According to company data, 8 million users now have paid licenses for Enterprise Gemini.

Initially, large investment plans caused some market volatility, but strong performance from Google Cloud quickly alleviated concerns. In December, Google Cloud revenue rose nearly 48%, exceeding market expectations.

Analysts note that the tangible financial benefits from AI investments have strengthened Wall Street’s confidence in Google. Alphabet now ranks among the world’s most valuable companies with a market capitalization exceeding $4 trillion, alongside Nvidia and Apple.

Meanwhile, overreliance on OpenAI has created pressure on shares of some tech companies. In this context, investors now view Google as relatively safer and stronger.