On Wednesday, Google reported its highest revenue growth rate in a single quarter in roughly four years. The tech giant’s revenue soared 20% in the first quarter of 2026 thanks in large part to the $20 billion in sales that the cloud computing unit in charge of its AI initiatives brought in.

The news is particularly huge considering that only a day ago, the AI industry was rocked with a Wall Street Journal report claiming that OpenAI had missed its own revenue and user targets because ChatGPT growth had slowed toward the end of last year. The revenue growth miss was reportedly bad enough to have CFO Sarah Friar worried about whether the AI giant could pay for its computing contracts. The reason, according to the report, was that Google’s Gemini had eaten into ChatGPT’s market share.

OpenAI is not a public company, so its financials are not made public and we can’t truly compare numbers, but as the creator of ChatGPT, OpenAI has enjoyed a leading position in the industry since it began the AI hype cycle a couple of years ago. But that position has been questioned over the past few months, particularly following on the heels of Google’s pretty well-received Gemini 3 release. Only a few weeks after Gemini 3 dazzled users, OpenAI declared a “code red” at the company.

OpenAI has double the reason to be afraid of the Wednesday earnings report because it was Google’s competitor offerings that really brought in the stellar revenue.

“The largest contributor to Cloud’s growth this quarter was AI solutions, driven by strong demand for industry-leading models, including Gemini 3,” Google parent company Alphabet’s CFO Anat Ashkenazi said in the company’s earnings call. CEO Sundar Pichai also said Google’s open models had been downloaded “over 500 million times.”

Google is shaping up to be a huge presence in the AI game, and a major competitor not just to AI tool providers like OpenAI and Anthropic, but also increasingly to infrastructure giant Nvidia. The company’s TPU chips have been rising in popularity and finding big-name clients like Meta. In the call, Ashkenazi said that they were “seeing unprecedented internal and external demand for AI compute resources.”

Among its competitors, Google enjoys a rare positioning as a leading competitor in both tools and infrastructure, and it’s the exact thing that executives are banking on for success.

“The fact that we own frontier models [and] own the silicon really helps us stay ahead of the curve,” Pichai said.

That positioning also makes Google’s cloud business a crucial indicator of the health of the AI boom. Investors have gambled unimaginable amounts of money on the fact that AI demand will play out as promised by the industry, and the recent OpenAI report has gotten people worried that might not be the case. Google’s numbers might provide some solace, at least for now.

Agentic search and ads in Gemini

As for what’s next, company executives shared that the focus right now is on AI mode, Google’s biggest bet in incorporating AI into the Search experience.

Pichai also said that there is “a huge opportunity ahead” for agentic AI “in the context of Search.” That premise of having an AI system browse the internet for you is something the company has been really banking on, to varying degrees of success.

“Obviously, we are in very, very early innings of all that, but our investments in our full-stack AI approach, I think, put us in a good position to bring those experiences to Search,” Pichai said. Company executives also said to expect news about Search at the upcoming Google I/O conference in mid-May, though they did not specify whether it would have something to do with AI.

On the Gemini side of things, Google executives said their main focus is on the free offerings, and while there is no rush, ads are probably going to be introduced at one point to the chatbot.

“Let’s also be clear, ads have always been a big part of scaling products to reach billions of people, and if done well, ads can be really valuable and really helpful commercial information, and at the right moment, we’ll share any plans,” Google’s chief business officer Philipp Schindler said in the call.