Google (GOOG, GOOGL) on Monday became the fourth company to join the $4 trillion market cap club, riding a wave of investor excitement related to its latest AI advancements. It's now the second most valuable company after Nvidia.

The search giant joins Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA) on the short list of names that have crossed the threshold, though Microsoft has since pulled back below the market milestone. Nvidia topped $5 trillion in October but has since fallen back into the $4 trillion range.

The company is one of the biggest beneficiaries of the AI trade, thanks to its Google Cloud Platform. On Nov. 18, Google debuted its Gemini 3 AI model, which received full-throated endorsements from executives including Salesforce CEO Mark Benioff.

On Nov. 25, The Information reported that the company is in talks with Meta (META) to provide the social media firm with its custom TPU AI chips for use in its own data centers. In October, Google inked a deal with Anthropic (ANTH.PVT) that will see the Claude developer use up to a million of Google's TPUs to power its AI services.

Google's potential chip arrangement with Meta puts Nvidia in a difficult spot, as investors questioned whether the AI GPU leader could hold on to its lead with increased competition from one of its own customers.

Like Google, Amazon, Meta, and Microsoft have developed their own custom data center chips.

Nvidia, however, pushed back against fears that Google posed a threat to its future, saying at the time that its chips are a generation ahead of Google's.

Google's milestone marks a stunning turnaround for its AI fortunes. The company was largely caught flatfooted when OpenAI debuted ChatGPT in November 2022, despite Google's involvement in helping to develop the transformative technology behind ChatGPT.

A few months later, Microsoft announced it was rolling out its own chatbot powered by ChatGPT, thanks to its early investments in the AI company. Google tried to match that with its own chatbot, but it fell flat.

That led to fears that Google's search crown was in jeopardy as consumers began using ChatGPT to find information on the web.

But over the years, Google has steadily improved its own AI models, incorporating them into its search platform via AI Overviews, found at the top of search pages, as well as its AI Mode. Google has also brought Gemini to its Android operating system, Google Maps, and other services.

Still, no company can afford to be complacent in the ever-evolving AI race. Shortly after Google debuted Gemini 3, Anthropic launched its Claude Opus 4.5, which the company said beats Gemini 3 in certain benchmarks.

OpenAI, xAI, and Meta aren't sitting idly by, either. Expect each company to continue changing places between being the AI model leader in the coming months and years.

Google, along with its tech cohort, is also spending billions on new data centers, raising concerns about an AI bubble. And while some analysts say we're still far from something akin to the dot-com bubble of the late 1990s, famed investor Michael Burry claims that some companies, including Oracle (ORCL) and Meta, are inflating their earnings by extending the functional life of their AI chips on paper.

And with multiple companies surpassing their capital expenditure records over the past year, those bubble concerns are likely to persist.

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

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