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Google’s Gemini 3 AI model has helped fuel a major turnaround for the company.
But it’s not the only thing that has put the company and its stock on an absolute tear.
Its custom chips, antitrust win, and backing from Warren Buffett have all strengthened its position.
Google is on a tear right now — but its success in the AI race wasn’t always guaranteed.
In late 2022, OpenAI captured the moment with the release of ChatGPT. After a number of fumbles as Google struggled to get its own chatbot out the door, some of the closest Google watchers were calling for CEO Sundar Pichai to step down.
Nearly three years later, Google has performed a miraculous turnaround. Its new AI model, Gemini 3, is proving such a win that Marc Benioff said he’s switching from ChatGPT. Google has just surpassed Microsoft’s market cap and is on its way to a $4 trillion status. Its stock price is up nearly 70% this year.
It’s a signal that Google — which has always held the various pieces to compete — has finally got everything working in harmony, all the way from the models up to the platforms like Search that put them in users’ hands.
In the fast-moving AI race, no victory is secure — but Google has never looked stronger. Here’s why.
1. Gemini 3 is a hit
Google DeepMind CEO Demis Hassabis. CAMILLE COHEN/AFP via Getty Images
Gemini 3 rolled out to the public last week with rave reviews. It outperforms its predecessor in coding, design, and analysis, and surpasses competing models in benchmark tests. As we at Business Insider discovered, it’s highly adept at designing websites and basic video games, giving it broader use beyond coding.
The new model has allayed some fears that Google was too far behind rivals and that scaling laws — rules that say AI models improve with more data and compute — were slowing down. The company’s stock price has increased by more than 12% since the rollout of Gemini 3 on November 18.
2. When the chips are up
Google’s TPU strategy appears to be paying off. Joan Cros/NurPhoto via Getty Images
Google has spent over a decade developing its own chips for internal use. Known as Tensor Processing Units (TPUs), Google has used these chips to train its Gemini models. That’s a great advertisement as Google hopes more companies will adopt the chips for their own models.
Google sells access to its TPUs through its cloud business and has made a significant internal push in recent months to attract more customers. That could pose a long-term threat to Nvidia’s business. Google is currently in discussions for a blockbuster deal with Meta worth billions of dollars, which would potentially host some of Google’s chips in one of Meta’s own data centers, according to a person familiar with the discussions. The Information first reported on the arrangement, which sent the shares of chip companies like AMD and Nvidia tumbling on Tuesday.
3. Google’s monopoly win
Google avoided being broken up in a major antitrust case. Drew Angerer/Getty Images
In September, a federal judge handed down penalties for an antitrust lawsuit brought against Google’s search business in 2020. Those penalties, which threatened to tear up Google’s lucrative search empire, amounted to little more than a slap on the wrist. Google was told it could continue making payments to partners such as Apple for default status, but could not do so exclusively. It was also ordered to share some search data with rivals.
At one point, Google’s Chrome browser was on the chopping block, which could have severed a crucial part of Google’s search-advertising flywheel. Despite the judge ruling that Google had acted as a monopoly, the company came away relatively unscathed.
4. Warren Buffett takes a stake
Warren Buffett, the CEO of Berkshire Hathaway. Nati Harnik/AP
Warren Buffett’s Berkshire Hathaway built a $4.3 billion stake in Google parent company Alphabet last quarter, a regulatory filing revealed. That’s notable for two reasons. Other than Apple, Buffett has tended to avoid tech stocks. He has also historically avoided expensive, high-growth companies.
As Buffett prepares to step back as CEO, the decision to finally bet on Google — something he said he wished he’d done long ago — suggests strong confidence in the search giant.
5. Search is surviving its AI makeover… so far
Liz Reid, the head of Google Search. CAMILLE COHEN/AFP via Getty Images
Google’s core moneymaker is still search advertising, and one of the big investor fears has been how Google’s self-disruption might hurt its cash cow. Not a lot, apparently: Search revenues jumped 15% in the third quarter, suggesting that even if AI is hurting some websites’ traffic, it’s not harming Google’s business.
In fact, Google says generative AI is causing people to search more than ever. The company is currently testing ads in AI Mode, its chatbot-like version of search that is gradually feeling like less of an experiment and more like Google’s vision for how search will eventually work.
