Fears that Google would lose the AI race have well and truly been overturned, as evidenced by parent company Alphabet’s march to a $4 trillion valuation.

The immediate catalyst was a deal with Apple that will see Google’s Gemini models help power a revamped version of Siri. That news pushed Alphabet past a threshold already crossed by Nvidia, Microsoft and Apple.

However, Apple and Microsoft now sit closer to $3.8 trillion and $3.4 trillion, respectively, leaving Alphabet to jostle with Nvidia – currently worth $4.5 trillion – at the top of the market-cap league table.

It’s quite the turnaround. For some time Google was widely seen as the likely loser from the launch of ChatGPT in November 2022. Investors worried that search – its core profit engine – would be eroded by chatbots, while regulators appeared determined to break the company up.

Since then those fears have ebbed. Gemini now attracts more than 650 million monthly users, Google’s cloud business is growing briskly and courts have shown little appetite for dismantling the firm.

Bespoke Investment Group notes Alphabet’s ascent to second place by market value breaks a long-standing pattern in which Apple and Microsoft have traded the position between them. It also marks the first time since 2019 that Apple has fallen behind Google.

Having soared 70 per cent over the past year, Alphabet is no longer cheap, with its valuation multiples climbing sharply from a year ago. The group now trades on 30 times estimated earnings, a higher multiple than Nvidia (24).

However, while Nvidia’s fortunes are tightly bound to the AI investment cycle, Google remains a diversified cash-generating machine. That’s one reason why Big Short investor and AI sceptic Michael Burry is betting against Nvidia but not Alphabet.

Betting against Alphabet is less a wager on an AI bubble bursting, he argues, than a bet against “Google Search in all its forms”, along with Android and Waymo (Alphabet’s autonomous driving arm) and much else besides.

For investors, that breadth matters. Alphabet may not need to dominate the AI race to justify its place near the top of the market.