Google's parent company Alphabet has achieved a milestone that only three companies have reached before: a $4 trillion market capitalization. The tech giant crossed the threshold Monday after Apple announced a multi-year partnership that will see Google's Gemini AI models power the next generation of Siri and Apple Intelligence features.

The deal represents a stunning validation of Google's artificial intelligence strategy and creates an unlikely alliance between two companies that have competed fiercely for decades.

The Partnership That Moved Markets

Apple confirmed Monday that Google's Gemini will be the foundation for its artificial intelligence capabilities, powering everything from an overhauled Siri assistant to the broader Apple Intelligence feature set coming to iPhones, iPads, and Macs this year.

The multi-year agreement gives Google unprecedented access to Apple's ecosystem of more than two billion active devices. For Apple, which has struggled to match the AI capabilities of competitors, the deal provides immediate access to one of the world's most advanced large language models.

"This partnership marks a major validation moment for Google. After years of questions about whether Alphabet could monetize its AI investments, Apple's endorsement provides the clearest answer yet."

— Dan Ives, Wedbush Securities analyst

Inside the $4 Trillion Club

Alphabet joins an exclusive cohort. Only Nvidia, Microsoft, and Apple have previously reached the $4 trillion milestone. Remarkably, Alphabet has now overtaken Apple to become the world's second-most valuable company, trailing only chip giant Nvidia.

The ascent has been swift. Alphabet's stock rose approximately 65% in 2025, driven by strong cloud revenue growth and increasing confidence in its AI capabilities. The Apple deal added another catalyst, pushing shares to an all-time high of $334.04 before settling at $331.86.

Google Cloud has been particularly impressive, with revenue surging 34% in the third quarter and its backlog reaching $155 billion—a sign that enterprise customers are betting heavily on Google's AI infrastructure.

Why Apple Chose Google

Apple's decision to partner with Google rather than build its own competitive AI model reflects a pragmatic assessment of the landscape. Developing a world-class large language model requires billions in investment, years of research, and talent that has largely consolidated at a handful of companies.

Apple attempted to develop its own AI capabilities but reportedly fell behind competitors. Rather than release an inferior product, Apple opted to license the best available technology—even from a company it has publicly sparred with over privacy and business practices.

The partnership may also reflect changing dynamics in the smartphone market. With hardware innovation slowing and AI becoming the primary differentiator, Apple needed a competitive response to Samsung's Galaxy AI features and Google's own Pixel AI capabilities.

The Regulatory Shadow

Alphabet's triumph comes even as the company faces significant regulatory challenges. The Justice Department won a landmark antitrust case against Google's search monopoly last year, and remedies could include forcing the company to divest its Chrome browser or modify its search distribution agreements.

Ironically, the Apple partnership could complicate those proceedings. Regulators have specifically targeted Google's payments to Apple to remain the default search engine on iPhones. A deeper AI partnership suggests the companies' interests are increasingly intertwined, potentially raising new antitrust questions.

Still, investors appear willing to look past regulatory concerns. "The regulatory overhang is real, but the AI opportunity is bigger," wrote one analyst. "Google is positioned across the entire AI stack—from data centers to consumer applications."

What's Driving the AI Premium

The market is assigning an enormous premium to companies perceived as AI leaders. Nvidia has traded at valuations that would have seemed absurd a few years ago. Microsoft commands a premium partly based on its OpenAI partnership and Copilot integration. Now Alphabet is receiving similar treatment.

The bet is that AI will transform every industry and that the companies building the foundational models will capture disproportionate value. Google's Gemini, trained on the company's vast data resources and running on its custom TPU chips, represents one of the most capable models available.

With Apple's endorsement, Gemini will now reach hundreds of millions of users who might never have interacted with Google's AI directly. That distribution advantage could prove decisive as AI assistants become the primary interface for computing.

What Comes Next

Alphabet is scheduled to report fourth-quarter and full-year 2025 results on February 4. Investors will scrutinize cloud revenue growth, AI-related capital expenditures, and any additional details about the Apple partnership's financial terms.

The company has guided for continued heavy investment in AI infrastructure, including new data centers and custom chip development. Those investments have weighed on margins but positioned Google for the AI era.

For now, Alphabet sits comfortably in the $4 trillion club—a position few predicted when ChatGPT's launch in late 2022 seemed to threaten Google's core search business. The company's response has silenced many critics and enriched shareholders who believed in the AI pivot.

Whether Alphabet can maintain its position depends on execution in an intensely competitive market. But the Apple deal suggests the company has earned its place among technology's most valuable enterprises.