AI throne battle changes unexpectedly: OpenAI's halo fades into a "burden", Alphabet regains popularity with its "omnipotent" ecosystem.

Understood, the sentiment on Wall Street towards companies related to artificial intelligence is changing, focusing mainly on two companies: OpenAI is losing momentum, while Alphabet (GOOGL.US) is thriving. The ChatGPT manufacturer is no longer seen as being at the forefront of AI technology and is facing questions about its lack of profitability and the need for rapid expansion to fulfill its massive spending commitments. Meanwhile, Alphabet is emerging as a strong competitor with substantial financial resources and a presence in various aspects of the AI industry. "Earlier this year, OpenAI was seen as the pride of heaven, while Alphabet was viewed in a completely different light," said Brett Ewing, Chief Market Strategist at First Franklin Financial Services Corporation. "Now, the market sentiment towards OpenAI has cooled down significantly." As a result, companies within the OpenAI ecosystem - primarily Oracle Corporation (ORCL.US), CoreWeave (CRWV.US), and AMD (AMD.US), as well as Microsoft Corporation (MSFT.US), NVIDIA Corporation (NVDA.US), and SoftBank Group holding 11% of OpenAI's shares - are facing heavy selling pressure. At the same time, Alphabet's strong momentum is not only driving up its own stock price but also boosting the stocks of companies related to it, such as Broadcom Inc. (AVGO.US), Lumentum (LITE.US), Celestica Inc. (CLS.US), and TTM Technologies, Inc. (TTMI.US). This shift in sentiment is both dramatic in magnitude and speed. Just a few weeks ago, any company associated with OpenAI could see a significant increase in stock prices. Now, these affiliations appear more burdensome. Considering the company's core position in driving the AI boom that fueled the stock market over the past three years, this change has widespread implications. "People have seen the complexity of its financing structure, circular trades, and debt issues," Ewing said. "I'm sure Alphabet's ecosystem also has some of these issues to some extent, but they were exposed much more egregiously in OpenAI's dealings, which has changed market sentiment." A portfolio of companies associated with OpenAI has risen by 74% in 2025, a respectable performance, but far less than the 146% increase for stocks related to Alphabet. The tech-heavy Nasdaq 100 index has risen by 22%. The skepticism surrounding OpenAI can be traced back to August when their release of GPT-5 had a lukewarm reception. Last month, when Alphabet released its latest Gemini AI model to rave reviews, these doubts intensified. As a result, OpenAI CEO Sam Man announced a "Code Red" status, focusing on improving the quality of ChatGPT and delaying other projects until its flagship product meets standards. "Alphabet's perceived strength is not only in Gemini. The company ranks third in market capitalization in the S&P 500 index and has a large amount of cash on hand. It also has a range of related businesses, such as Alphabet Inc. Class C Cloud, and an increasingly prominent semiconductor manufacturing business. This is not to mention the company's advantages in AI data, talent, and distribution, or its successful subsidiaries like YouTube and Waymo. "More and more people think that Alphabet has all the elements to become the leading builder of AI models," said Brian Coleiro, Senior Tech Equity Strategist at Morningstar. "Just a few months ago, investors would have given that title to OpenAI. Now there is more uncertainty, more competition, and more risks that OpenAI is not a sure bet." Representatives from OpenAI and Alphabet did not respond to requests for comment. The difference between first and second place is not only about reputation but also has significant financial implications for the companies and their partners. For example, if users shift to Gemini, leading to a slowdown in ChatGPT growth, OpenAI will find it harder to pay for cloud computing capacity from Oracle Corporation or chips from AMD. On the other hand, partners involved in building Alphabet's AI capabilities are thriving. Lumentum, which produces optical components for Alphabet data centers, has seen its stock price more than doubled this year, placing it among the top 30 companies in the Russell 3000 index. Tin Horng, which provides hardware for Alphabet's AI infrastructure construction, saw its stock price increase by 252% in 2025. Meanwhile, Broadcom Inc., which manufactures Tensor Processing Units (TPUs) chips for Alphabet, has seen its stock price surge by 68% since the end of last year. Ambitious Deals and Doubts OpenAI announced a series of ambitious deals in recent months. This string of activities "naturally raised scrutiny and concerns about whether OpenAI can fund all of this, whether it has overpromised and underdelivered," Coleiro said. "The timing of its revenue growth is uncertain, and every improvement made by competitors adds to the risk of its ambitions unrealized." To be fair, investors initially welcomed many of these deals as they seemed to herald the emergence of a new generation of AI winners. But as market sentiment shifts, they suddenly began to adopt a wait-and-see approach. "When people thought it could generate revenue and achieve WINOX, those big transaction figures seemed possible," said Brian Kozma, Portfolio Manager at GQG Partners, which manages around $160 billion in assets. "Now, people are no longer believing and starting to question." Kozma views the AI frenzy as "an artificially pumped-up internet bubble" and says his company has shifted from significantly overweighting tech stocks to highly skeptical. "The tech sector is where we are trying to avoid the overheated areas, many of which have been fueled by OpenAI," he said. "As many sectors have been affected, this will be a painful deflation process. It's not just a few tech companies that need a pullback, even though they are a significant part of the indexes. All these bets have parallel trades, such as utility stocks, which are closely related. That's where our concern lies, not just that OpenAI created this narrative, but that so many things were hyped up." OpenAI's public relations missteps have not helped matters. The company's CFO, Sarah Fria, recently suggested that the US government should "provide guarantees to allow financing to take place," which surprised some people. However, she and Sam Man later clarified that the company did not request such guarantees. Then there was Sam Man's appearance on the "Bg2 Pod" podcast, where he was asked how the company could make spending commitments that far exceed its revenue. The CEO's response was, "If you want to sell your shares, I'll find you a buyer." Sam Man's casual response was problematic, as according to estimates from HSBC, the gap between OpenAI's revenue and spending plans until 2033 is around $207 billion. "Narrowing this gap requires a combination of one or more factors, including revenue higher than our base predictions, better cost management, additional capital injections, or debt issuances," analyst Nicholas Coates-Collison wrote in a research report on November 24. Considering that OpenAI is expected to generate over $12 billion in revenue by 2025, its cost calculations "exacerbate investor anxiety about related returns," not only for the company itself, "but for the intertwined AI industry chain as well," he wrote. Not All is Lost Of course, companies like Oracle Corporation and AMD are not entirely dependent on OpenAI. The demand in their respective fields remains strong, and their products can find customers even without OpenAI. Additionally, according to a recent analysis by Wells Fargo & Company, the stock weakness might represent a buying opportunity since, for the first time since 2016, stocks related to ChatGPT and the required chips are trading at a lower valuation than stocks related to Gemini and its chips. "I see a lot of industry needs and market penetration space that is still untapped, which will ultimately support growth," said Kiran Osborne, Chief Investment Officer at Mission Wealth, managing around $13 billion in assets. "Monetization is the ultimate goal for these companies, as long as they move towards that goal, it will support the investment logic."