Key Takeaways
- Google parent Alphabet said it plans to spend $75 billion in capital expenditures this year, as it expands capacity to meet demand for AI.
- CFO Anat Ashkenazi said a majority of that spending would go toward technical infrastructure, such as servers and data centers.
- The announcement comes after Microsoft and Meta also said they would commit tens of billions of dollars in capital expenditures to support their AI ambitions.
Google parent Alphabet (GOOGL) said it plans to invest $75 billion in capital expenditures this year, as it joins Big Tech rivals in accelerating spending on artificial intelligence infrastructure.
On the company’s fourth-quarter earnings call, CFO Anat Ashkenazi said a majority of that spending would “go towards our technical infrastructure, which includes servers and data centers,” with $16 billion to $18 billion expected in the first quarter.
The investment is needed to keep up with demand for AI, CEO Sundar Pichai said, with Google Cloud customers consuming more than eight times the compute capacity they did 18 months ago.
The announcement comes just days after Meta (META) and Microsoft (MSFT) also committed tens of billions of dollars to capital expenditures this year as they build out their AI infrastructure. Last week, Meta said it plans to invest $60 billion to $65 billion this year, while Microsoft said it plans to spend $80 billion on infrastructure in its 2025 fiscal year.
The major capital commitments also come as the emergence of competition from Chinese firms like AI startup DeepSeek set in motion what Bank of America analysts are saying could be “AI’s Sputnik moment.” The analysts suggested DeepSeek, which claimed to develop an AI model rivaling American ones for a fraction of the cost, could push U.S. hyperscalers like Alphabet, Microsoft, and Amazon (AMZN) to spend even more on AI. Amazon is expected to report fourth-quarter earnings after the market closes Thursday.
Greater AI spending from Alphabet and its peers could be good news for chipmakers like Nvidia (NVDA), which received a shoutout from Pichai during Alphabet’s earnings call. Pichai said Alphabet intends to continue its “strong relationship” with Nvidia, after announcing its first customer running on Nvidia’s Blackwell platform last week.
Shares of Alphabet fell nearly 8% in extended trading Tuesday after the tech giant’s fourth-quarter cloud revenue missed analysts’ expectations. The stock had closed at a record high of $206.38, and added about 43% over the past 12 months through Tuesday’s close.