Google, sleeping giant in AI race, now 'fully awake'

New software and deals reassure investors that the company won't easily lose to ChatGPT creator OpenAI and other rivals

- By Mark BERGEN AND NEWLEY PURNELL

JEFF CHIU Associated Press GOOGLE Chief Executive Sundar Pichai, pictured in May, has been willing to splurge on talent.

Since the launch of ChatGPT three years ago, analysts and technologists — even a Google engineer and the company’s former chief executive — have declared Google behind in the high-stakes race to develop artificial intelligence.

Not anymore.

The internet giant has released new AI software and struck deals, such as a chip tie-up with Anthropic PBC, that have reassured investors the company won't easily lose to ChatGPT creator OpenAI and other rivals.

Google’s newest multipurpose model, Gemini 3, won immediate praise for its capabilities in reasoning and coding, as well as niche tasks that have tripped up AI chatbots. Google’s cloud business, once an also ran, is growing steadily, thanks in part to the global rush to develop AI services.

And there are signs of rising demand for Google’s specialized AI chips, one of the few viable alternatives to Nvidia Corp.’s dominant gear. A report on Monday that Meta Platforms Inc. is in talks to use Google’s chips sent shares of its parent Alphabet Inc. soaring. The stock has added nearly $1 trillion in market capitalization since mid-October, helped by Warren Buffett taking a $4.9-billion stake during the third quarter and broader Wall Street enthusiasm for its AI efforts.

Google owner Alphabet Inc.’s shares rose as much as 3.22% in New York on Tuesday. The company is on track to hit a $4-trillion market capitalization for the first time.

SoftBank Group, one of Open AI’s biggest backers, fell to a two-month low on Tuesday on worries about the competition from Google’s Gemini. Nvidia shares fell as much as 5.51% on Tuesday, erasing $243 billion in market value.