Google parent Alphabet latest tech giant to announce plans to spend billions on AI
Alphabet said Wednesday that capital expenditure could as much as double this year, in yet another aggressive spending ramp-up by the Google parent as it deepens investments to push ahead in the AI race.Alphabet shares were volatile in after-hours trading — falling 6% before recouping losses, as investors weighed the swell in spending against surging revenue and profit, both of which beat expectations in the December quarter.The company said it was targeting capital expenditure of $175 billion to $185 billion this year, a massive jump compared with average analyst expectations that it would spend about $115.26 billion this year, according to data compiled by LSEG.CEO Sundar Pichai said in a release that Alphabet hiked its forecast spending “to meet customer demand and capitalize on the growing opportunities we have ahead of us.”He added: “We’re seeing our AI investments and infrastructure drive revenue and growth across the board.”The company spent $91.45 billion in 2025, primarily on AI infrastructure including servers, data centers and networking equipment.That compares with its projections for total spending of between $91 billion and $93 billion last year.Growth in Google’s cloud division, where the company is enjoying early returns on AI investment, helped the stock pare losses.
The unit’s revenue grew 48% to $17.7 billion in the fourth quarter ended December, compared with analysts’ average estimate of a 35.2% jump, according to data compiled by LSEG.“Google Cloud growth was far ahead of expectations and importantly higher growth than Microsoft Azure for the first time in several years,” said Gil Luria, D.A.Davidson analyst.
“The acceleration in Google Cloud seems to justify the increased [capex] investment.”The company reported total revenue of $113.83 billion for the quarter, beating analyst estimates of $111.43 billion, per LSEG data.Adjusted profit per share of $2.82 also beat estimates of $2.63.Cloud computing majors ha...