Google parent Alphabet latest tech giant to announce plans to spend billions on AI | Latest Tech News
Alphabet said Wednesday that capital expenditure might as a lot as double this 12 months, in yet another aggressive spending ramp-up by the Google parent as it deepens investments to push forward in the AI race.
Alphabet shares have been unstable in after-hours trading — falling 6% before recouping losses, as traders weighed the swell in spending against surging income and revenue, both of which beat expectations in the December quarter.
The company said it was focusing on capital expenditure of $175 billion to $185 billion this 12 months, a huge bounce in contrast with average analyst expectations that it might spend about $115.26 billion this 12 months, according to data compiled by LSEG.
Sundar Pichai’s Alphabet said the company was focusing on capital expenditure of $175 billion to $185 billion this 12 months, a huge bounce in contrast to what analysts have been anticipating.
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 facilities and networking tools. That compares with its projections for complete spending of between $91 billion and $93 billion last 12 months.
Growth in Google’s cloud division, where the company is having fun with early returns on AI investment, helped the stock pare losses. The unit’s income grew 48% to $17.7 billion in the fourth quarter ended December, in contrast with analysts’ average estimate of a 35.2% bounce, according to data compiled by LSEG.
The company spent $91.45 billion in 2025, primarily on AI infrastructure including servers, data facilities and networking tools. Getty Images
“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 complete income of $113.83 billion for the quarter, beating analyst estimates of $111.43 billion, per LSEG data. Adjusted revenue per share of $2.82 also beat estimates of $2.63.
Cloud computing majors have poured a whole bunch of billions of {dollars} to develop their AI infrastructure, both to meet the growing enterprise demand for their cloud providers and to fuel their own development of AI applied sciences and merchandise.
Like bigger rivals Amazon Web Services and Microsoft’s Azure, Google Cloud has been grappling with capability constraints that have dented its potential to absolutely money in on AI demand from its clients.
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.” AP
Along with Meta, the big cloud firms are anticipated to collectively shell out more than $500 billion on AI this 12 months. Meta last week hiked capital investment for AI development this 12 months by 73%, focusing on spending between $115 billion and $135 billion, while Microsoft also reported document quarterly capital expenditure.
The aggressive enlargement in outlay comes at a time when traders have more and more grown involved about payoffs from AI investments. However, Google has been in a position to show strong progress in its AI efforts.
The launch of its latest Gemini 3 model in November noticed strong reception and propelled the company ahead in the AI arms race. Following the launch, Sam Altman, CEO of AI frontrunner and ChatGPT creator OpenAI, reportedly issued an inside “code red” to push groups to speed up development.
The launch of its latest Gemini 3 model in November noticed strong reception and propelled the company ahead in the AI arms race. AP
Google’s Gemini AI assistant app exceeded 750 million customers per month, Pichai said, up by 100 million in contrast with November.
Last month, Google struck a deal to energy Apple’s revamped Siri voice assistant with its Gemini fashions, a partnership that unlocks a large market for Google, with Apple’s put in base of over 2.5 billion devices.
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