Alphabet hits $4 trillion valuation as AI pivot pays off

Alphabet has officially joined the $4 trillion club, a milestone that seemed far away just two years ago, when the company was scrambling to respond to the rise of ChatGPT. The surge in its stock price was mainly because its investors are quite happy, now that the company's successful and aggressive pivot towards an AI-first revenue model has finally started paying off.

For much of 2024, the narrative around Google in the AI race was one of a "sleeping giant" caught off guard. One of the main catalysts is the launch of Gemini 3, which also began rolling out across Google's ecosystem earlier this month. Unlike previous AI integrations, which felt like a hit or miss, the integration of Gemini 3 into core products like Gmail and Workspace has shown its investors that AI is indeed monetizable.

Since 2024, Google has been investing massively to scale up its AI infrastructure, as well as making changes to its corporate structure. The consolidation of teams like Google AI Studio and Gemini API into Google DeepMind in early 2025 also streamlined the company's fragmented AI efforts, allowing for faster deployment of models like the Ironwood (7th Gen) TPUs. These chips have become a critical asset not just for Google's own training, but also to lure major partners.

Google's partnership with Anthropic served as an external validation of its hardware superiority, where the company secured a "tens of billions" commitment from a top competitor to use its cloud infrastructure.

Google is certainly more confident with its AI, as the company is shifting its hardware strategy and has been busy integrating Gemini into the Pixel series, as well as its WearOS devices, mimicking Apple's 'walled garden' but with superior AI intelligence as the hook. Google's partnership with Apple to power the next generation of Siri, following internal setbacks at Cupertino, has further given more leverage to Google as well as solidified investor confidence.

via Reuters

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Posted Tuesday 13 January 2026 at 12:05 pm AEST (my time).

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