Google Mounts Formidable Challenge to OpenAI as ChatGPT Turns three
MOUNTAIN VIEW, CA – November 21, 2024 – Three years after the launch of ChatGPT ignited the generative AI revolution, Google is emerging as a powerful competitor, leveraging its substantial resources and a unified strategy to challenge OpenAI’s early dominance. While OpenAI’s ChatGPT boasts 800 million weekly users, Google’s Gemini app has reached 650 million users, and analysts suggest Google is rapidly gaining momentum.
Google’s confidence is rooted in its core strengths: a massive and continuously updated data corpus, a profitable core business funding extensive research and development, and large-scale computing infrastructure.CEO Sundar Pichai emphasized the company’s “full, deep, full-stack approach to AI” on a recent earnings call.
This approach was accelerated by a 2023 reorganization, placing DeepMind’s Demis Hassabis in charge of Google’s combined AI division with a mandate to advance frontier models. Hassabis has reportedly been successful in retaining key talent despite significant offers from rival companies.
Alphabet’s stock has surged, with its forward earnings multiple rising to 27x – exceeding its 10-year average of 20x. However, its 14-day Relative Strength Index (RSI) has reached 75, signaling potential for a market correction, according to Bloomberg. Matthew Maley of Miller Tabak told Bloomberg that Google “could take the leadership role for the AI industry going forward,” but cautioned the stock “could be due for a pullback.”
Despite Google’s progress, OpenAI and Microsoft currently maintain stronger enterprise traction than Google Cloud, wich remains third in market share behind Amazon Web Services (AWS) and Azure. Forrester’s Thomas Husson acknowledged Google’s resurgence, stating, “It’s definitely fair to say that Google is back in the game with Gemini 3.” He paraphrased Mark Twain, adding that reports of Google’s decline “have been widely exaggerated.”
Three years ago, Google was playing catch-up to OpenAI’s initial breakthrough. Now, the company is leveraging years of research, infrastructure investment-including over $90 billion in AI infrastructure spending-and a dedicated chip strategy to present a significant challenge to OpenAI’s first-mover advantage. Google’s substantial investment positions it to possibly define the next phase of generative AI development.
