Alphabet Inc., the parent company of Google, became the fourth Big Tech giant to reach a valuation of $4 trillion on Monday.
This once-unthinkable milestone has evolved into more of a rite of passage in the race for artificial intelligence.
Just four months after Google avoided the U.S. government’s attempt to dismantle its online empire after a court last year declared its ubiquitous search engine to be an unconstitutional monopoly, Alphabet crossed the threshold.
A federal court overseeing the case ordered a shake-up that many investors saw as a slap on the wrist in an attempt to stop such abuses.
Since then, Alphabet’s stock price has increased by 57%, adding $1.4 trillion to shareholder wealth.
The quick ascent propelled Alphabet into the $4 trillion club, which has already welcomed computer chipmaker Nvidia, the first to do so in July.
Last year, the market values of both Apple and Microsoft exceeded $4 trillion, but they have since declined due to concerns that the AI expenditure bubble may burst.
Nvidia’s market valuation temporarily surpassed $5 trillion in late October before declining due to worries about the AI bubble.
In the meantime, Facebook parent Meta Platforms is valued at $1.6 trillion for some of the same reasons as Amazon, which is presently valued at $2.6 trillion due in part to its AI aspirations.
Tesla, an electric carmaker, is also making significant bets on artificial intelligence.
As a result, the business, which is currently worth $1.5 trillion, approved a compensation package that would pay CEO Elon Musk $1 trillion if a number of goals are met, including reaching a market value of more than $8.5 trillion.
On the same day that Apple revealed it will rely on Google’s AI technology to enhance its virtual assistant Siri after failing in its own attempts to add more sophisticated functions to the iPhone, Alphabet joined the $4 trillion club.
Google is utilizing technology to transform its search engine into a more conversational answer engine, aiming to compete with companies like OpenAI’s ChatGPT and Perplexity. As a result, Google is well-positioned to become one of the major winners in the AI race.
Since its recent release, the next iteration of the Gemini model, which powers Google’s AI technology, has received overwhelmingly positive evaluations.
As a result, Alphabet’s stock price has increased while the shares of other AI-driven companies have declined due to persistent concerns about a bubble.
Over the past three years, Google’s Cloud division—which offers AI capabilities to government agencies and corporate clients—has become Alphabet’s fastest-growing business.
Meanwhile, Waymo’s robotaxi company has been able to deploy more self-driving cars in American cities thanks to AI technology.
One of the reasons U.S. District Judge Amit Mehta rejected the U.S. Justice Department’s petition to compel Google to surrender its industry-leading Chrome web browser was the competitive dangers posed by emerging AI stars like OpenAI and Perplexity.
The judge reasoned that major changes in internet search had already been brought about by the technological advancements made possible by AI.
If investors’ perceptions of Alphabet’s exposure to a potential AI bubble suddenly change, the company’s market value could plummet.
In a November interview with the BBC, even Alphabet CEO Sundar Pichai acknowledged that certain market “irrationality” is causing the stock prices of Big Tech companies to soar.
If the joy brought forth by AI abruptly fades, Pichai stated, “I think no company is going to be immune, including us.”
