Google threatens to overtake OpenAI in AI race with investment push

Alphabet’s AI investments into AI computing capacity have perhaps led to the company doubling its capital expenditures in 2026 to between $175 billion and $185 billion.

Reuters reported that Google has moved from “laggard to leader” and has broken Wall Street estimations of Alphabet, Google’s parent company. This is significant from this time last year, when investors found Google was falling behind its competitors.

During a post-earnings call on Wednesday, executives from Alphabet were reportedly confident – particularly after the release of Gemini 3, Google’s latest AI model and its ‘most intelligent’ yet, according to its website.

“Overall, we’re seeing our AI investments and infrastructure drive revenue and growth across the board,” CEO Sundar Pichai said, according to Reuters. “We are also seeing significantly higher engagement per user, especially since the launch of Gemini 3.”

He added that the Google Gemini app, which rivals OpenAI’s ChatGPT, surpassed 750 million monthly active users at the end of the ⁠December quarter. Although still behind ChatGPT, which exceeds 800 million weekly active users, this is a strong increase for Gemini’s creator.

Gemini 3 has also been integrated into ‘AI Mode’ in Google’s search engine.

Google has been pushing ahead with its AI developments for some time, which led to scrutiny of the company in 2024 for its emissions spiking 13% on account of its AI-enabled data centres.

Recently, the company has been moving ahead with global data centre operations, having made its largest investment in India to date with $15 billion being put into an AI data centre in Andhra Pradesh.

Likewise, it opened a new data centre in Winschoten, Groningen to help meet growing demand for its AI-powered services and power the AI economy in The Netherlands – in addition to finally committing to a much-anticipated new data centre site in Austria to establish more of a presence in the region.

Whilst Google makes gains, however, Microsoft shares struggled last week – Reuters said – in part due to rising concerns over its reliance on OpenAI. Nvidia and Apple continue to have market capitalisations of more than $4 trillion.

Companies like Intel and Oracle, however, have reportedly struggled to finance AI endeavours. Both of which Capacity has covered recently:

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Having made a series of multi-billion-dollar deals recently, OpenAI is still losing money – sparking concerns over how the startup could finance the commitments it has made.

Despite this, company CEO Sam Altman said that its newest innovation, the Codex app, is the first time since ChatGPT where he has felt a “ChatGPT moment”.

Speaking at the Cisco AI Summit earlier this week, he said: “The capability of AI feels to me the biggest it’s ever been. We are planning for a world where demand will grow at an accelerated pace each year.”

Ex-Google CEO warns Europe risks AI dependence on US and China

Metro Connect USA 2026

23 February 2026

Metro Connect USA is the largest executive-level digital infrastructure event in the U.S. The only one of its kind, this 25-year-strong gathering is where decision makers come together to make deals happen.