Google parent Alphabet is now the world’s second-most valuable company—just behind Nvidia—with a market capitalisation of more than $4 trillion. The milestone follows Apple choosing Google’s Gemini models to power Siri’s next major upgrade. For markets, the deal was a definitive signal that Google had won the first “great pivot” of the AI era.
“After careful evaluation, Apple determined that Google’s AI technology provides the most capable foundation for Apple Foundation Models and is excited about the innovative new experiences it will unlock for Apple users,” Apple had said in a statement, while also asserting that its arrangement with OpenAI—allowing users to access ChatGPT for certain queries—remains unchanged.
The turnaround has not been easy. After OpenAI’s ChatGPT burst onto the scene in 2022, Google was widely perceived as an AI laggard. That narrative began to reverse only last year, as the company executed rapidly across products, partnerships and platforms.
In 2025, Alphabet shifted decisively into what insiders describe as “aggressive incumbent” mode. After a tepid start to the year—its shares fell 18% in the first quarter, the worst period since mid-2022—the stock surged 65% by year-end, hitting record highs and assuring investors that it can retain dominance in an AI-first internet.
Now, after a year marked by a coherent AI strategy, deep partnerships, accelerating cloud growth and key legal wins, analysts are openly debating whether Alphabet could even overtake Nvidia to become the world’s most valuable company.
2025: The Defining Year
In a December 2024 strategy meeting, Google CEO Sundar Pichai reportedly told employees: “I think 2025 will be critical. We must internalise the urgency of this moment, and we need to move faster as a company. The stakes are high. These are disruptive moments.”
At the time, OpenAI’s ChatGPT and Sora were capturing consumer attention, while investors worried that AI chatbots and agents could upend Google’s advertising-driven business model. Pichai’s long-term vision was under scrutiny. For Google, it was a critical time.
The response was swift. In March 2025, Google rolled out AI Mode in Search and launched Gemini 2.5, its most advanced model at the time. In April, long-time executive Josh Woodward was promoted to lead the Gemini app—Google’s answer to ChatGPT.
Momentum sustained through the year. In August, DeepMind unveiled Nano Banana, a new image-editing model. September saw the launch of AI features in Chrome. By then, Gemini had crossed five billion generated images and overtaken ChatGPT at the top of Apple’s App Store.
November marked a turning point with the launch of Gemini 3. A month later, reportedly alarmed by Gemini’s traction, OpenAI CEO Sam Altman issued an internal “code red” memo, asking teams to refocus on improving ChatGPT’s core product and pause other initiatives.
According to Sensor Tower, between August and November 2025, Gemini’s global monthly active users grew by around 30%—outpacing ChatGPT’s 6% growth over the same period.
“Google’s AI credibility clicked with the markets,” observes Ankita Vashishtha, founder and managing partner at Arise Ventures. “The narrative shifted from ‘Google is behind’ to ‘Google is one of the few full-stack AI companies’, with models, distribution and infrastructure,” she tells AIM.
Winning Products, Winning Partnerships
With Gemini 3, Google moved beyond simple chatbots and into agentic AI. It was not just a model, but a reasoning system. Its Deep Think mode—designed to emulate human reflection—scored 91.9% on GPQA Diamond, a benchmark for PhD-level scientific reasoning, leapfrogging OpenAI’s GPT-5 on technical accuracy.
Google also launched a “Flash” variant, positioning itself as a leader in high-speed, low-latency AI for developers. Crucially, Gemini was integrated directly into Search, demonstrating that AI could enhance rather than cannibalise Google’s core advertising business.
At the same time, Google Cloud emerged as a genuine second growth engine, reducing Alphabet’s reliance on advertising alone. The company leaned into its infrastructure advantage, including custom chips and TPUs, which it increasingly rents out as AI compute. This not only improves margins but also gives Google leverage against rivals dependent on Nvidia GPUs. Google Cloud revenue jumped 34% in Q3 2025, ending the quarter with a sales backlog of $155 billion.
High-stakes partnerships amplified that momentum. Beyond Apple, Google struck an expanded deal with Samsung, announcing plans to double the number of devices featuring Gemini. Meta is also reportedly in talks to spend billions on Google’s custom TPUs, viewing them as a credible alternative to Nvidia’s costly H100 and B200 chips.
“Being the intelligence layer inside Apple’s ecosystem makes Google’s AI ambient,” notes Sanchit Vir Gogia, founder of Greyhound Research. “Users don’t choose it—they encounter it. That strengthens Google’s feedback loops and sends a powerful signal to enterprises about maturity, safety and reliability at scale.”
Legal and institutional wins further bolstered confidence. In September 2025, a US judge ruled against a forced breakup of Google, allowing it to retain Chrome and Android, and lifting a long-standing overhang on the stock. When Berkshire Hathaway disclosed a multi-billion-dollar stake in Alphabet later last year, it reinforced the perception of Google as a durable, long-term bet in an AI-driven world.
2026: Most Valued Company?
Whether Alphabet can overtake Nvidia is less about superiority and more about cycle dynamics. Nvidia is the primary chip supplier enabling AI infrastructure buildout, while Google monetises what sits on top of that infrastructure.
“If AI demand remains supply-constrained and hardware-driven, Nvidia stays ahead,” Gogia observes. “If the market shifts towards normalisation, cost pressure and returns on deployed AI, platform durability becomes more valuable. That’s where Google looks attractive.”
Alphabet’s advantage is diversification. It monetises AI across ads, cloud services, enterprise software, consumer productivity tools, and developer ecosystems. Its internal compute stack provides a structural hedge: TPUs are not about replacing Nvidia overnight, but lowering marginal costs, improving negotiating leverage, and protecting long-term margins.
Nvidia remains extraordinarily strong, but it is also more exposed to cyclicality, customer concentration and capex digestion. Google’s valuation is steadier, and in a maturing AI market, that can be its advantage.
Apple–Google Deal: A New Power Concentration?
The Apple–Google deal has also raised concerns. Elon Musk was among the first to react, posting on X: “This seems like an unreasonable concentration of power for Google, given that they also have Android and Chrome.”
Apple’s choice of Gemini is both a validation and a distribution coup. It effectively endorses Google’s models at a massive consumer scale, pulling developers and enterprises towards Google’s stack. But it also signals a duopoly: one company controls premium hardware and operating systems, the other controls AI models and global search monetisation.
“The risk isn’t just big companies partnering—it’s foreclosure,” warns Vashishtha. “Defaults, deep integrations and data advantages can make it harder for smaller players to compete.”
As AI becomes embedded in daily workflows, consumer habits increasingly shape enterprise procurement. Defaults turn into de facto standards, creating subtle lock-in even when organisations pursue multi-vendor strategies. That, in turn, raises regulatory stakes.
Google has strengthened its position dramatically. But in doing so, it has also led to a sharper scrutiny from regulators, partners, and enterprises.
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