Alphabet plans record spending in race to win AI customers

"Alphabet Inc. topped projections for quarterly revenue and outlined an ambitious capital spending plan, far surpassing predictions, leveraging its growth to build out the data centers and infrastructure needed to lead in the AI age. Google's parent company said capital expenditures will reach as much as $185 billion this year, compared with the $119.5 billion analysts expected. Fourth-quarter sales, excluding partner payouts, were $97.23 billion, surpassing the $95.2 billion average estimate, according to data compiled by Bloomberg."

"Expected spending for 2026 will total more than what the internet search giant spent in the three prior years combined. But Chief Executive Officer Sundar Pichai reassured investors that the costs are necessary. We're seeing our AI investments and infrastructure drive revenue and growth across the board, he said Wednesday in a statement."

"Google Cloud revenue in the recent period jumped 48% to $17.7 billion, beating the $16.2 billion analysts expected, and Gemini, its artificial intelligence model, is rapidly reaching new users, Alphabet said. Google has raced to reinvent its business for the AI age, working to keep consumers in the habit of going to its search page even when they could also go to chatbots from rivals like OpenAI. The company has quickly improved its Gemini model and integrated it across products an effort that has required massive investment in data centers and chips for model improvement and cloud customers."

Alphabet topped revenue projections and announced an ambitious capital spending plan to build data centers and AI infrastructure. Capital expenditures will reach as much as $185 billion this year, versus $119.5 billion expected. Fourth-quarter sales, excluding partner payouts, were $97.23 billion, above the $95.2 billion estimate. Expected spending for 2026 will exceed what the company spent in the three prior years combined. The company characterized AI-related costs as necessary and said AI investments and infrastructure are driving revenue and growth. Google Cloud revenue rose 48% to $17.7 billion and Gemini is rapidly reaching new users as it is integrated across products.

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