This isn’t likely to be a particularly controversial take, but right now it looks like Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Google’s parent company, is looking like it will emerge as the artificial intelligence (AI) leader over the next couple of years.
The reasons why are pretty straightforward.
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First, Google Gemini is gobbling up market share and is likely to overtake ChatGPT soon.
Second, Alphabet is working to separate itself from Nvidia for its hardware needs with its Tensor Processing Unit (TPU) chip.
Third, per its latest results, Alphabet is leveraging its considerably greater resources than the competition.
Let’s discuss all three to illustrate why Alphabet is positioning itself to become the AI kingpin by the end of 2027.
When OpenAI launched ChatGPT in 2022, it quickly became the leader in the generative AI space simply for lack of competition.
By 2023, competitors like Alphabet, Anthropic, and Meta Platforms had brought their competitors to market, but ChatGPT still held 50% market share in the enterprise large language model (LLM) space.
As reported by Menlo Ventures, in the two years since, ChatGPT fell to 27% market share, Anthropic grew from 12% to 40% market share, and Google’s Gemini grew from 7% to 21%.
It’s on a trajectory to overtake ChatGPT this year if current trends continue, and then it will be a race to the top between Google and Anthropic. Even then, Google wins.
In addition to Gemini, Alphabet has its own proprietary AI hardware, the TPU, developed in partnership with Broadcom.
I won’t get into the weeds technically here, but suffice it to say Alphabet’s TPU offers a hardware alternative to Nvidia’s GPU. And Anthropic is expanding its use of Alphabet’s hardware to the tune of 1 million TPUs.
So, Google even wins from Gemini’s main competitor because that competitor will be using a lot of Google’s hardware.
Now, on to the $400 billion elephant in the room. Alphabet’s biggest edge is that while neither OpenAI nor Anthropic has turned a profit yet, it is already profitable, and its revenue for 2025 exceeded $400 billion. That’s a 15% increase over 2024. Net income was up 32% over 2024 to $132.1 billion.
None of that was particularly surprising. Google has been growing and profitable for a long time. What did surprise people was the fact that the company is going to roughly double its capital expenditures in 2026 to $175 billion to $185 billion.
finance.yahoo.com
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