Alphabet’s (GOOGL) Google recently landed a deal with NATO that investors should watch closely. The military alliance picked Google Cloud to upgrade its digital systems. While the exact dollar amount remains under wraps, these government contracts can often stretch into hundreds of millions over time.
NATO will gain access to specialized cloud technology that runs entirely off-grid, which is essential for classified military information. Google calls this setup “air-gapped,” and it’s designed for the Joint Analysis, Training and Education Center to run artificial intelligence (AI) tools and data analysis without any security vulnerabilities.
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The deal could provide Alphabet with long-term recurring revenue, as defense contracts are sticky. The technology involved is Google Distributed Cloud, which enables organizations to run AI and analytics on sensitive data while maintaining complete control and meeting strict security requirements.
NATO chose Google over competitors precisely because these systems can handle classified workloads while staying completely isolated from public networks. For investors, the deal validates Google’s enterprise capabilities in high-stakes environments and opens the door to similar contracts with NATO member nations.
Valued at a market cap of more than $3.8 trillion, Alphabet stock has almost doubled in the past year due to its widening AI moat. The tech giant recently unveiled Gemini 3, its newest AI model that represents a major leap forward in the company’s AI capabilities.
The new model shows substantial improvements over Gemini 2.5, which arrived less than a year ago. Users get better answers to complex questions without needing to provide as much context upfront. Google plans to integrate Gemini 3 across its search products, the Gemini app, and enterprise services. Early testing suggests the model performs exceptionally well against industry benchmarks.
ChatGPT still dominates, however, with 81% of the global chatbot market, while Gemini’s share is quite low at 2.8%. Bank of America (BAC) analysts view Gemini 3 as a positive step toward closing any perceived performance gap with competitors, given the healthy adoption of AI Overviews.
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