Google Just Became the AI Winner (And Nobody Saw It Coming)

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Hey everyone,

Something absolutely wild just happened in the AI world, and it's one of those moments where you can actually watch the future being rewritten in real-time.

Six months ago, Google looked finished in AI. Done. Cooked. The company that literally invented the technology behind ChatGPT somehow got blindsided by OpenAI, and everyone was writing them off as the Blockbuster of the AI era.

Today? Google's stock is up 30% while everyone else is bleeding. They've added a trillion dollars in market cap. Warren Buffett—Warren freaking Buffett, the guy who avoided tech stocks for decades—just dropped $4 billion into Google stock.

And the craziest part? Google just released an AI model that's better than ChatGPT. Not "almost as good." Better.

Let me explain how this happened, why it matters, and what it means for where money is flowing next.

Let's rewind to understand just how dramatic this comeback is.

When ChatGPT launched in late 2022, Google got absolutely destroyed. This was supposed to be their moment. They published the original Transformer paper—the foundational research behind all modern AI. They acquired DeepMind. They had more data than anyone on the planet.

And then OpenAI, this scrappy nonprofit-turned-company, released ChatGPT and changed everything overnight. It wasn't just that OpenAI had a hit product. It was that large language models suddenly looked like they could replace Google Search—the engine that generates almost all of Google's revenue.

Google's response? A disaster called Bard.

Remember the Black George Washington scandal? Google's AI image generator started producing historically inaccurate images that went viral for all the wrong reasons. The company looked sloppy, panicked, and out of touch. Their stock dropped 11% in the following weeks.

It got so bad that Google's founders—Larry Page and Sergey Brin, who had basically retired—came back to try and save the company.

Then came the antitrust lawsuit threatening to break up Chrome, the core engine of Google's ads business.

Six months ago, the narrative was simple: Google fumbled the AI revolution, and it's going to cost them everything.

But then something changed. Actually, a lot of things changed all at once.

First, in September, a judge ruled in Google's favor and allowed them to keep Chrome. Crisis averted.

Then Google's Q3 earnings absolutely smashed expectations. Search revenue was up 15% year-over-year. All those fears about chatbots replacing search? Overblown. People were still Googling everything, and advertisers were still paying top dollar.

Then came Warren Buffett's move. Berkshire Hathaway disclosed a $4 billion investment in Google—their first ever position in the company. When the Oracle of Omaha, who traditionally avoids tech stocks, gives you his stamp of approval on an AI play? That means something.

But none of that would have mattered if Google hadn't delivered on the technology itself.

On November 18th, they dropped Gemini 3.

And it changed everything.

Here's why Gemini 3 is such a big deal.

In AI, your model's performance is basically the litmus test for who's winning. OpenAI had been in first place since ChatGPT launched. Anthropic's Claude was maybe second. Everyone else was playing catch-up.

Gemini 3 leapfrogged both of them.

Salesforce CEO Marc Benioff—one of tech's most influential executives—called the leap in reasoning "insane" and said "the world just changed again" and that he'd "never go back to ChatGPT."

But forget the hype. Let's look at the actual rankings.

Gemini 3 is now the #1 AI model according to the three most respected benchmarks:

1. LMSYS Chatbot Arena - This is like the people's choice award. Real users do blind taste tests comparing different AI models, and they vote on which answers are best. Gemini 3 didn't just win—it became the first model in history to break the 1500 ELO barrier. It's now ranked #1 in chat, vision, and coding. A clean sweep.

2. Humanity's Last Exam - This measures PhD-level intelligence and reasoning. OpenAI scored 26%. Gemini 3? A 36%. That's a generational leap in logic and problem-solving ability.

3. SWE-bench - This is the gold standard for evaluating how well AI can actually write code. For the first time ever, Google dethroned Claude (which had been the king of coding). Gemini 3 is now the most capable coding assistant available.

So Google has the best product. But having the best product doesn't always matter if nobody uses it, right?

ChatGPT has 800 million weekly active users. That's massive. That's Instagram-level scale.

But here's what nobody saw coming: Gemini has rocketed to 650 million monthly active users. Traffic to Gemini spiked 46% in just the last month alone.

Google is closing the gap at terrifying speed because they have something OpenAI doesn't: distribution built into a billion-person ecosystem.

Gemini is getting integrated into Gmail, Google Docs, YouTube, Android, Chrome—every single Google product that billions of people use every day. You don't have to convince people to try a new product. It's just... there, in tools they already use.

OpenAI has to fight for every user. Google just has to flip a switch.

This is why the market is freaking out. Google went from "getting disrupted" to "dominating" almost overnight.

But there's another layer to this story that's causing even bigger shockwaves through the market.

Google trained Gemini 3 using its own AI chips. They completely cut Nvidia out.

This is absolutely massive. Here's why.

Nvidia is the most valuable company in the world right now because everyone building AI has to buy their chips. Microsoft, Meta, Amazon, Google—they're all paying premium prices for Nvidia's GPUs because there's basically no substitute. Nvidia's gross margins are 75%. Seventy-five percent! It's printing money.

But here's the problem Nvidia has always faced: their biggest customers want to cut them out and capture those margins for themselves.

Microsoft, Amazon, and Meta have all been trying frantically to build their own custom AI chips. But investors have been skeptical. Can these companies really build chips good enough to replace Nvidia?

Gemini 3 just answered that question. Yes, they can.

Google didn't use any Nvidia hardware to train Gemini 3. Instead, they used their proprietary TPU chips (Tensor Processing Units). And they didn't just build a decent model—they built the best model.

This shattered the myth that serious AI requires Nvidia's GPUs.

Then things got even crazier. Reports leaked that Google now wants to sell its AI chips to other companies, putting them in direct competition with Nvidia.

Meta is reportedly in talks to use Google's TPUs for their data centers. If Meta switches even 20% of their compute to Google's chips, that's billions of dollars vanishing from Nvidia's revenue.

The Information reported that Google executives have a plan to capture up to 10% of Nvidia's AI chip revenue. That would shift tens of billions of dollars from Nvidia to Google.

Now, let's be realistic—TPUs taking significant market share from Nvidia could take years. The entire AI industry already runs on Nvidia infrastructure. But the fact that it's even possible? That changes the calculus for investors.

There's one more piece of this puzzle that's making Google look even better by comparison.

OpenAI is starting to show cracks.

On a recent podcast, famous VC Brad Gerstner (who's an OpenAI investor) asked CEO Sam Altman how a company generating $13 billion in revenue could justify committing to $1.4 trillion in capital expenditures.

Sam's response? He basically told Brad he could sell his shares if he wasn't on board. "Brad, if you want to sell your shares, I'll find you a buyer."

Not exactly reassuring when an investor asks a legitimate financial question.

Then OpenAI's CFO publicly said the company was exploring a "federal backstop"—basically asking for a government bailout. If you need to explore bailouts, that's a signal you can't actually afford the massive investments you're making.

Compare that to Google. In 2025, Google expects to generate $377 billion in revenue and up to $100 billion in net income. Google will generate seven times more profit than OpenAI will do in total sales.

Here's the insight I keep coming back to:

Investors are terrified of an AI bubble, but they don't want to miss out on the massive growth.

So they're looking for companies that give them AI upside without the AI-only risk. And Google is the perfect answer to that problem.

If AI disappeared tomorrow, Nvidia would lose 99% of its revenue. OpenAI would be worthless. But Google? They'd still be printing tens of billions in profit from their advertising business that's been a cash machine since the early 2000s.

Google has downside protection as a Warren Buffett value stock while also having huge upside as the leader of the AI revolution. It's the best of both worlds.

This is why money is flooding into Google right now. It's not just about having the best AI model (though that helps). It's about being the only company that's both:

I'm not saying everyone should run out and buy Google stock. That's not my call to make, and this isn't financial advice.

But I am paying very close attention to this dynamic: mature, profitable tech companies that have real AI capabilities are becoming the safe harbor in a stormy AI market.

The pure AI plays like OpenAI (when it eventually goes public) will be volatile, speculative, and risky. The Google's of the world? They're starting to look like you can have your cake and eat it too.

The next six months are going to be fascinating. Can Google maintain this lead? Will OpenAI strike back? Can Nvidia defend its chip moat?

I don't know. But I'm watching closely, because wherever this shakes out, that's where a lot of wealth is going to flow.

The AI race just got real. And the winner might not be who we thought it would be six months ago.

—Alex