Alphabet hits $400B as Gemini app surges to 750 million users
Google closes the gap on OpenAI as Gemini hits 750M users and Alphabet posts record $400B revenue.
Key Highlights
- •Gemini App crosses 750M monthly active users, narrowing the gap with ChatGPT's 810M.
- •Alphabet surpasses $400 billion in annual revenue for the first time in history.
- •AI serving costs dropped by 78% year-over-year due to new Ironwood TPU chips.
The gap is closing faster than anyone predicted. Just three months after lagging significantly behind OpenAI, Google revealed on Thursday that its Gemini app has crossed 750 million monthly active users, putting it within striking distance of ChatGPT’s estimated 810 million. The disclosure, dropped during a blockbuster Q4 earnings call where Alphabet reported surpassing $400 billion in annual revenue for the first time, signals that Google’s aggressive ecosystem integration is finally paying off.
“The launch of Gemini 3 was a major milestone and we have great momentum,” CEO Sundar Pichai told investors, noting that the company’s first-party models now process over 10 billion tokens per minute via API.
For Wall Street, the user numbers were a relief, but the margin data was the victory. After fears that AI compute costs would eat into margins, Google reported a 78% reduction in serving costs for Gemini over the last year. This efficiency, driven by the new Ironwood TPU chips and model optimizations, has allowed Alphabet to defend its 32% operating margin while aggressively scaling the free tier of Gemini to students and global markets.
The growth narrative has shifted from "playing catch-up" to "ecosystem lock-in." While ChatGPT remains the dominant destination for casual conversation, Gemini’s surge is being driven by its deep integration into the Android and Workspace ecosystems. The company noted that the Gemini 3 model, released in December, saw the fastest adoption of any Google AI product to date.
Critically, the “trust gap” appears to be narrowing. In early 2024, Google struggled with public perception regarding hallucination and model refusal. However, the Q4 report highlighted that the new Gemini 3 Pro model has seen a sharp increase in retention for complex queries, specifically in coding and academic analysis, where accuracy is paramount. This aligns with external data suggesting that while ChatGPT wins on daily casual volume, Gemini is capturing the "Deep Work" demographic that relies on large context windows and real-time research verification.
Why One Student Switched An insider perspective on the shift from ChatGPT to Gemini.
The data reflects a growing trend on university campuses. I recently spoke with a computer science undergraduate who represents the exact demographic Google is winning over. After relying on ChatGPT for daily tasks, they shifted their entire workflow, coding, analysis, and creative work, to Gemini Pro.
"I felt the hallucination problem I faced with ChatGPT is much less in Gemini Pro," they explained. For students, the killer feature isn't just the chat; it's the integrated Research option, which grounds answers in verified sources, making it indispensable for university assignments. Furthermore, the "Nano Banana" image generator has become a favorite for creative projects, outperforming competitors in speed and fidelity. "I got Gemini Pro for free because I'm a uni student, and I’ve shifted all my work there," they added. This aggressive student-tier pricing strategy is clearly fueling the 750 million figure reported today.
