Google pulls ahead of OpenAI as AI growth accelerates

Reuters reports Alphabet said its Gemini 3 model raised user engagement and that the Google Gemini app reached about 750 million monthly active users, and the company signalled much higher capital spending for AI by outlining a potential $175–$185 billion capex range for 2026.

Alphabet signalled a clearer AI-driven growth story after releasing its Gemini 3 model and holding a post-earnings call that conveyed greater confidence. Executives said AI investments are beginning to generate returns across both consumer and enterprise businesses. The company highlighted strong usage of the Google Gemini app and linked higher spending plans to building AI computing capacity. The reporting has come amid broader market reassessment of which firms are leading the AI race. Reported highlights: - User growth: The article reports the Google Gemini app reached about 750 million monthly active users at the end of the December quarter, up from 650 million the prior period. - Enterprise traction: The article says the enterprise version of Gemini had reached about 8 million paying licenses. - Capital spending: The article reports Alphabet signalled it may raise 2026 capital expenditures to $175–$185 billion, citing investments in AI computing capacity. - Revenue signals: The article states Google Cloud revenue grew about 48% in the December quarter and that executives said AI investments are driving revenue across the company. - Market reaction and comparisons: The article mentions Alphabet's shares initially fell as much as 6% after the capex news then traded flat after hours, and it notes investors are increasingly comparing Alphabet favourably with firms linked to OpenAI. - OpenAI links: The article notes concerns reported in the market about OpenAI's large deals and funding needs and cites moves by companies such as Microsoft and Oracle in that context. Summary: The report describes a shift in market sentiment as Alphabet presents evidence that recent AI work, led by Gemini 3, is lifting engagement and contributing to revenue growth. Alphabet also signalled much larger AI-related capital spending for 2026 while reporting strong cloud growth. Undetermined at this time.