Daijiworld Media Network - San Francisco

San Francisco, Jan 13: Google parent Alphabet Inc. on Monday became the fourth global technology giant to reach a market valuation of $4 trillion, a milestone driven largely by the accelerating race to dominate artificial intelligence.

Alphabet touched the landmark just four months after it escaped a potential break-up of its internet empire, following a US court ruling last year that termed its search engine an illegal monopoly. Investors viewed the remedial measures ordered by the federal judge as relatively mild, triggering a sharp rally in the stock.

Since the ruling, Alphabet’s shares have surged 57%, adding an estimated $1.4 trillion in shareholder wealth. The rally has propelled the company into an exclusive club that already includes chipmaker Nvidia, which was the first to cross the $4 trillion mark in July, as well as Apple and Microsoft, both of which briefly surpassed the level last year before slipping amid concerns of an AI spending bubble.

Nvidia’s valuation even crossed $5 trillion briefly in October before retreating on similar fears. Meanwhile, Amazon is currently valued at about $2.6 trillion, Meta Platforms at $1.6 trillion, and Tesla at around $1.5 trillion, all buoyed to varying degrees by AI-driven optimism.

Alphabet’s entry into the $4 trillion club coincided with Apple announcing that it would rely on Google’s AI technology to enhance its virtual assistant Siri, after struggling to deliver advanced features independently.

Google is seen as a strong contender in the AI race, with efforts underway to transform its search engine into a conversational answer platform to compete with OpenAI’s ChatGPT and Perplexity. The latest version of its Gemini AI model has received positive reviews, helping lift Alphabet’s stock even as broader AI stocks face volatility.

The company’s Cloud division, which offers AI tools to businesses and governments, has emerged as its fastest-growing segment over the past three years. AI advancements have also boosted Alphabet’s Waymo unit, enabling the expansion of its self-driving taxi services across several US cities.

Rising competition from AI-focused firms was one of the factors cited by US District Judge Amit Mehta in rejecting the Justice Department’s proposal to force Google to sell its Chrome browser, noting that AI-driven innovation is already reshaping online search.

Despite the optimism, Alphabet executives have cautioned against excessive exuberance. CEO Sundar Pichai acknowledged in a recent interview that some “irrationality” is fuelling Big Tech valuations and warned that no company would be immune if the AI-driven euphoria were to fade.