Alphabet is asserting itself as a leader in artificial intelligence (AI), signaling to Wall Street that the Google parent is now ahead of rivals like OpenAI, a marked turnaround from a year ago when investors perceived it as lagging behind.
The company’s first post-earnings call since the launch of its Gemini 3 model underscored confidence in AI-fuelled growth. Although Alphabet did not name competitors, executives highlighted that AI investments are now generating returns across its entire business, justifying a potential doubling of capital expenditures in 2026 to $175–185 billion for AI computing infrastructure.
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CEO Sundar Pichai noted that the Google Gemini app, which competes with OpenAI’s ChatGPT, reached 750 million monthly active users in December, up from 650 million in the prior quarter. While trailing ChatGPT’s 800 million weekly active users, Pichai said engagement per user had increased significantly since Gemini 3’s launch. The model has also been integrated into Google Search’s “AI Mode” and powers Google’s enterprise Gemini product, which now counts 8 million paying licences.
Despite initial market jitters over Alphabet’s soaring capex, strong revenue growth from Google Cloud — up 48% in the December quarter — reinforced investor confidence. The company’s AI-powered gains across its consumer and enterprise segments suggest that Alphabet’s investments are beginning to deliver tangible financial returns.
Market analysts say Alphabet’s solid performance contrasts sharply with the sentiment around OpenAI and its tech partners. Microsoft and Oracle, heavily reliant on OpenAI, have seen significant stock declines amid investor concerns about funding and AI infrastructure spending. By contrast, Alphabet shares have risen roughly 36% over the past year, supported by major deals powering products for Meta and Apple.
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“This time last year, every announcement by OpenAI was applauded,” said Paul Meeks of Freedom Capital Markets. “Now the market favors Google because its AI spending is translating into revenue across the company.”
Alphabet’s broad-based AI strategy and deep investment in infrastructure appear to have secured its position as a frontrunner in the global AI landscape.