AI News Monitor

Google’s parent company, Alphabet, announced plans to invest $75 billion in capital expenditures this year to expand its AI infrastructure, as competition in artificial intelligence heats up among tech giants.

During Alphabet’s fourth-quarter earnings call, CFO Anat Ashkenazi stated that most of the spending will go toward technical infrastructure, including servers and data centers, with $16 billion to $18 billion expected in the first quarter. CEO Sundar Pichai emphasized the need for this investment, citing a surge in demand for AI services, with Google Cloud customers using over eight times the compute power compared to 18 months ago.

The move follows similar announcements from Meta (META) and Microsoft (MSFT), which recently pledged tens of billions of dollars toward AI infrastructure. Meta expects to invest between $60 billion and $65 billion in 2024, while Microsoft plans to spend $80 billion in its 2025 fiscal year.

Analysts suggest that rising competition, including emerging AI firms from China like DeepSeek, could drive U.S. tech giants to accelerate their AI spending even further. The increased demand for AI infrastructure is also expected to benefit chipmakers such as Nvidia (NVDA), which Pichai highlighted as a key partner during the earnings call.

Despite the ambitious investment, Alphabet’s stock fell nearly 8% in after-hours trading following lower-than-expected cloud revenue results. The stock had previously closed at a record high of $206.38, marking a 43% gain over the past year.

As the AI race intensifies, Alphabet’s spending underscores the increasing need for advanced computing power and infrastructure to stay ahead in the evolving AI landscape.