Google's AI resurgence: Confidence grows as search and Gemini thrive despite competition

Google’s resurgence in the AI space has become increasingly evident, with executives at the company’s I/O conference in May signaling renewed confidence. Recent developments suggest this optimism is well-founded, as AI is strengthening rather than undermining its core search business. During a recent earnings call, CEO Sundar Pichai highlighted that AI Overviews in search results now drive over 10% more queries globally for relevant searches, with growth trending upward. This shift, particularly resonating with younger users, has revitalized Google’s search platform, countering concerns that AI chatbots like ChatGPT might render traditional search obsolete. The Gemini app, Google’s AI-powered chatbot, is also showing robust momentum. Daily prompts to Gemini surged over 50% in the last quarter, and monthly active users exceeded 450 million, up from 350 million in March. Google processed nearly a quadrillion AI tokens across its products in June, doubling the May figure. These numbers underscore the company’s expanding AI footprint and its ability to scale operations amid fierce competition. Google’s confidence extends to its approach to the AI talent wars. Pichai emphasized that retention rates and new hires remain strong, dismissing isolated defections as “individual cases” that don’t reflect broader trends. In contrast, OpenAI’s research chief Mark Chen has criticized Meta for poaching talent, likening it to a “home invasion.” Meanwhile, DeepMind CEO Demis Hassabis acknowledged Meta’s efforts but noted the company is “not at the frontier” currently, suggesting Google maintains a strategic edge. Industry insiders agree that Google’s deep bench of AI expertise and its ability to attract talent through acquisitions like Windsurf—where it hired a startup’s core engineering team—position it as a resilient player. Meta’s investment in Scale AI, a data-labeling startup, further highlights the competitive dynamics. The deal valued Scale at $29 billion, with Meta acquiring a 49% stake for $14.3 billion. CEO Alexandr Wang will transition to a role at Meta, though Scale will remain independent. This move aligns with Meta’s push to bolster its AI capabilities, even as it faces challenges in keeping pace with rivals. Despite these gains, Google’s position isn’t without risks. The upcoming release of GPT-5 could disrupt its dominance, and ChatGPT’s widespread adoption as a “Kleenex of chatbots” remains a hurdle. Additionally, Google’s declining traffic to external websites threatens its traditional revenue model, while regulatory pressures, including potential antitrust actions and ending payments to Apple for iPhone default search status, loom large. Other notable shifts in the AI landscape include Mark Zuckerberg appointing Shengjia Zhao, a co-creator of ChatGPT and GPT-4, as chief AI scientist for his new Superintelligence lab. At Microsoft, AI head Mustafa Suleyman has recruited several Google DeepMind alumni, including Gemini’s engineering VP, Amar Subramanya. Meanwhile, Snap’s Darshan Kantak is stepping down ahead of earnings, and Anthropic’s Mike Krieger and Duolingo’s Luis von Ahn are joining Figma’s board ahead of its IPO. Google’s ability to navigate these challenges while maintaining growth suggests it remains a formidable force in the AI race, even as the industry evolves rapidly. The competition for talent and innovation continues to intensify, with companies like Meta and Microsoft aggressively expanding their teams. Yet, for now, Google’s strategic investments and operational resilience appear to be paying off.