Google goes from laggard to leader as it pulls ahead of OpenAI with stellar AI growth

Alphabet is taking on OpenAI with a gusto that underscores Wall Street’s perception that the Google parent is the leader in AI

Alphabet is taking on OpenAI with a gusto that underscores Wall Street’s perception that the Google parent is the leader in AI, a turn of events ​from a year ago when investors thought it was badly lagging behind rivals and punished its stock. Alphabet ‌executives struck a more confident tone on the company’s post-earnings call on Wednesday, the first since it released the Gemini ​3 model, which has wowed users and helped Google catch up in the artificial intelligence race.

Though it did not mention its chief AI rival by name, Alphabet’s newly confident messaging emphasised a key contrast: Investments in AI have begun to reap returns throughout the entire company. That served as Alphabet’s justification to potentially double its capital expenditures in 2026, to between $175 billion and $185 billion, as a result of massive investments into AI computing capacity.

Alphabet’s prepared remarks about AI in 2025 had focused on product usage and AI revenues generated specifically via its cloud-computing unit.

“Overall, we’re seeing our AI investments and infrastructure drive revenue and growth across the board,” CEO Sundar Pichai said.

Google’s ​fresh conviction about AI-fueled revenue is backed by growth in both its consumer and enterprise businesses.

Pichai said the Google Gemini ⁠app, which competes with OpenAI’s ChatGPT, exceeded 750 million monthly active users at the end of the December quarter, up from 650 million at the end of the prior period. That still trails ChatGPT, which OpenAI CEO Sam Altman said in October had eclipsed 800 million weekly active users.