Alphabet forecasts massive capex spend driven by AI

""We've been supply constrained even as we've been ramping up our capacity," he said."

""Obviously, our capex spend this year is an eye towards the future, and you have to keep in mind some of the time horizons are increasing in the supply chain, et cetera"."

""The demand we are seeing across the board, across our services, what we need to invest for future work for Google DeepMind, as well as for cloud, I think is exceptionally strong. I do expect to go through the year in a supply constrained way.""

""We were able to lower Gemini serving unit costs by 78 per cent over 2025 through model optimisations, efficiency, and utilisation improvements," he said."

Alphabet projected 2026 capital expenditures of $175–185 billion, a substantial increase from $91.4 billion the prior year and well above analysts' ~$115.2 billion expectation. CFO Anat Ashkenazi stated that 60% of 2025 capex was spent on servers and 40% on data centers and networking, with a similar split expected. Rivals Microsoft and AWS are also investing heavily, but capacity constraints persist across power, land, and supply chains even as capacity ramps. Google Cloud revenue rose 48% to $17.7 billion in Q4, advertising revenue reached $82.2 billion, Gemini has over 750 million monthly users, and serving costs fell sharply.

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