This news is especially big because just a day earlier, the AI industry was rocked by a Wall Street Journal report that claimed OpenAI had missed its own revenue and user goals as ChatGPT’s growth slowed late last year. The decline in revenue growth was reportedly so bad that CFO Sarah Fryer was concerned about whether the AI giant could pay for its computing contracts. According to the report, this was because Google’s Gemini had eaten into ChatGPT’s market share.
OpenAI is not a public company, so its financials are not made public and we can’t really compare the numbers, but as the creator of ChatGPT, OpenAI has taken a leading position in the industry since the AI hype cycle started a few years ago. But that position has been called into question over the past few months, especially after Google’s fairly well-received Gemini 3 release. Just weeks after Gemini 3 dazzled users, OpenAI declared a “code red” at the company.
OpenAI has doubly reason to be afraid of Wednesday’s earnings report because it was Google’s competing offerings that actually brought in the stellar revenues.
“AI solutions were the largest contributor to cloud growth this quarter, driven by strong demand for industry-leading models including Gemini 3,” Anat Ashkenazi, CFO of Google parent company Alphabet, said in the company’s earnings call. CEO Sundar Pichai also said that Google’s open model has been downloaded “over 500 million times”.
Google is shaping up to be a big presence in the AI game, and is a major competitor not only to AI tool providers like OpenAI and Anthropic, but also to infrastructure giant Nvidia. The company’s TPU chips are growing in popularity and finding big-name customers like Meta. In the call, Ashkenazi said they were “seeing unprecedented internal and external demand for AI computing resources.”
Among its competitors, Google enjoys a rare position as a leading competitor in both devices and infrastructure, and that is what executives are counting on for success.
“The fact that we have marginal models [and] “Owning the silicon really helps us stay ahead,” Pichai said.
This situation makes Google’s cloud business an important indicator of the health of the AI boom. Investors have staked unimaginable amounts of money on the fact that AI demand will match the industry’s promise, and the recent OpenAI report has people worried that probably won’t happen. Google’s figures may offer some solace, at least for now.
Agent Search and Advertising in Gemini
As for what’s next, company officials shared that the focus right now is on AI Mode, which is Google’s biggest bet in incorporating AI into the search experience.
Pichai also said there is “a huge opportunity ahead” for agentic AI “in terms of search.” The premise of an AI system to browse the internet for you is something the company is actually working on with varying degrees of success.
“Obviously, we’re in the very, very early innings of all this, but our investment in our full-stack AI approach has put us in a good position to bring those experiences to search,” Pichai said. Company officials also said they expected news about Search at the upcoming Google I/O conference in mid-May, though they did not specify whether it would have anything to do with AI.
On the Gemini side of things, Google executives said their main focus is on free offerings, and though there’s no rush, ads will likely be introduced into the chatbot at some point.
“Let’s also be clear, ads have always been a big part of bringing products to billions of people, and if done well, ads can be really valuable and really useful business information, and at the right time, we’ll share any plans that we have,” Philip Schindler, Google’s chief business officer, said in the call.
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