The ground is shifting in the battle for artificial intelligence (AI) supremacy. For a few years, OpenAI and its viral ChatGPT model have reigned over the technology competition, catching some of the big technology players off balance with how well the conversational AI tool was catching on with both consumers and software developers.
Now, the big technology players are beginning to fight back. Especially Alphabet (GOOG 0.05%) (GOOG 0.05%). The company's AI chatbot, Gemini, has grown its market share vs. ChatGPT, and it just launched a new model that reportedly blows the latter's capabilities out of the water.
Alphabet's stock has rallied already on this Gemini news, but it could rally even further in 2026 if these product launches start turning into massive amounts of new revenue.
NASDAQ: GOOG
Key Data Points
Rolling out Gemini 3
The launch this month of Gemini 3 could be described as the first moment Alphabet is playing offense instead of defense vs. the AI start-ups. Gemini 3 is the culmination of a decade-long investment the company has been making in AI, from infrastructure to consumer tools.
Gemini 3 is being deployed across the whole Google suite of products, including AI Mode in Google search results. Besides chatbot responses, Gemini 3 has deep-thinking research, lifelike image generation, coding development, and a slew of other products, all at the cutting edge.
Alphabet is able to deploy all these computationally intensive tasks at scale because of its AI infrastructure capabilities across Google Cloud, all powered by its internal computer chip called the Tensor Processing Unit (TPU) that is tailor-made for its own systems. No other big technology player -- let alone OpenAI -- has this level of infrastructure today, giving Alphabet an advantage in deploying AI tools at scale to users without breaking the bank.
Image source: Alphabet.
Can Alphabet dethrone OpenAI?
Before the launch of Gemini 3, Alphabet was already gaining on OpenAI. Its market share for AI chatbots had grown from close to nothing to an estimated 15%, making it the second-largest player in the space. Monthly active users (MAUs) were 650 million as of the latest update, compared to 800 million weekly users for ChatGPT (it is not disclosed how many weekly users of Gemini there are).
Now, Gemini 3 may help steal even more market share as it leapfrogs in capability ahead of ChatGPT. Gemini is still second in downloads on the App Store compared to ChatGPT, but that underplays the actual use of Gemini across other Alphabet products like Google Search and Google Docs. Over time, we should see Gemini integrated into even more Google properties, such as Google Maps and YouTube.
This gives Gemini -- and Alphabet -- a huge runway to keep growing usage of its AI products in the coming years, with the infrastructure backbone to make it happen.
GOOG Revenue (TTM) data by YCharts
Alphabet's revenue potential
Today, direct revenue from Gemini is rather small compared to Alphabet's total trailing-12-month revenue of $386 billion. It will be many years, if not over a decade, before it makes up a large portion of Alphabet's business.
What should excite investors right now is the potential for Alphabet to generate indirect revenue from Gemini by plugging the AI into its other properties, like Google Search and YouTube. This has led to steady revenue growth for the business, and should continue to propel revenue higher in the years to come. Sam Altman believes OpenAI can hit hundreds of billions in revenue because of ChatGPT, but that may flow to Alphabet instead if Alphabet leads the pack in AI usage.
Last quarter, Alphabet's revenue grew 15% year-over-year in constant currency. If this place of growth continues in 2026 and 2027, it will be because of the Gemini breakthroughs getting embedded across the Alphabet ecosystem of products, and the stock price will likely rally as a result.
