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Alphabet has announced plans to spend $75 billion USD on capital expenditures in 2025 with a focus on AI. In its latest earnings report, the company’s revenue grew but slightly missed market expectations.
In 2025, Google’s parent company Alphabet says it plans to spend $75 billion USD on capital expenditures, which is a sharp increase over Wall Street’s original estimates.
It is a major jump in spending over 2024, with analysts initially predicting investment at around $58 billion USD. This is according to LSEG data. The extra cash will be spent on expanding data centres, serves, and AI computing infrastructure. This is to support Google’s AI models and cloud services specifically.
The news coincides with the release of Google’s ‘Gemini 2.0’, an updated artificial intelligence model suite that the company promises to be the ‘most capable’ yet.
It’s worth noting that investors have expressed concern over the increased spending plans, with alarm bells ringing over the resources required to adequately run AI products. These fears have only been compounded in recent weeks with the emergence of DeepSeek, a Chinese chatbot and LLM alternative that claims to operate using a fraction of the resources of its US competitors.
Google’s CEO Sundar Pichai has pushed back and defended the decision to up spending, claiming that Alphabet must scale its AI capabilities in order to remain competitive against other providers.
This also comes hot off the heels of several regulatory investigations into Google.
US authorities have spent five years investigating the company’s supposed monopolist advertising and search business practices. Alphabet has appealed against such accusations. Keep in mind that Google has an estimated 88% market share of general online search.
Google also reported that revenue grew in the final quarter of 2024, but did not quite meet market expectations. Alphabet’s shares declined 9% in extending training after these numbers were announced.
