Has Google reclaimed its AI crown from OpenAI and Microsoft?
What's the story
Google has made a remarkable comeback in the artificial intelligence (AI) race, reclaiming its position as a leader. This turnaround comes after a tough year in 2024, when it faced stiff competition from the likes of other major companies. The company's CEO Sundar Pichai had even declared an internal 'Code Red' in response to events in 2022, amid fears of falling behind in the rapidly evolving AI landscape.
Early challenges
Google's initial struggles in the generative AI space
Despite years of research and development in similar technologies, Google was slow to launch them due to reputational concerns. Its first attempts at generative AI, like Bard and other AI features, were met with mixed results. These included bizarre search results and historically inaccurate images. There were even doubts about Pichai's ability to steer the company back on track.
Strategic shift
Pichai's vision for a new era of technology
In early 2025, Pichai sent an email to his employees, calling it a moment of urgency. He said the rapid evolution of technology presented a unique opportunity to reimagine their products and processes for this new era. This came after a tough year in 2024, when Google faced stiff competition from OpenAI, Microsoft, Meta and Perplexity in the AI race.
AI dominance
Google's AI models dominate industry benchmarks
By November 2025, Google had made a strong comeback with powerful frontier models that topped major industry benchmarks. The company also launched impressive AI products such as NotebookLM, Google Beam, and Flow, and features such as Nano Banana image generation. Its latest AI model Gemini 3 has been praised by rivals and tech leaders such as Tesla and xAI leader Elon Musk and OpenAI CEO Sam Altman.
Market success
Google's market cap surges, surpassing Microsoft
Google's AI resurgence has also translated into financial success. The company recently surpassed Microsoft in market cap, nearing the $4 trillion mark, a whopping 63% jump from last year. Salesforce CEO Marc Benioff even said he is switching to Gemini 3 after using ChatGPT for three years, calling the leap "insane."
Driving factors
Resurgence driven by long-term bets and talent
Industry analysts and former employees attribute Google's AI resurgence to its long-term bets paying off, a full-stack approach to AI, and the return of co-founder Sergey Brin. Anandan said Google has the highest talent density on Earth with an integrated system from chips to models to applications. He also noted that Alphabet posted its first-ever $100 billion quarter in October, driven by gains in Google Cloud, Search, YouTube ads, and subscription business.
Data advantage
Google's AI models trained on proprietary data
Counterpoint Research's Neil Shah said Google has the "ultimate foundation for gaining edge for its models" as the "freshest, most relevant proprietary data flows through Search, Android, and Ads." The company has invested heavily in making data more useful over the years across different sectors and verticals through existing products and new software. This strategy gives Google unprecedented distribution power to instantly test, optimize, and deploy highly capable models at scale.