Google Invests $185 Billion All in AI?

On the AI ​​table, Google has chosen to double down.

After the market closed on February 4th (Eastern Time), Alphabet, Google’s parent company, released its Q4 2025 earnings report, with both revenue and profit exceeding expectations. Cloud business grew by 48%, and the backlog of orders to be fulfilled reached $240 billion, ensuring short-term growth.

However, the market is more focused on the 2026 capital expenditure guidance—a staggering $175-185 billion, nearly 1.5 times the previous expectation of approximately $130 billion, and almost double year-on-year. This reflects Google’s determination to fully transform into an AI company. After the earnings release, the stock price fell by more than 6% in after-hours trading.

This money will primarily be invested in building AI computing power at Google DeepMind to meet the needs of cloud customers and upgrade the search advertising experience. Despite its strong financial resources, Google isn’t entirely flush with cash (it also issued $25 billion in unsecured bonds last November), leading to concerns that such high investment might not translate into strong performance. Another real pressure is depreciation. The economic lifespan of next-generation chips may only be around three years, and Alphabet expects depreciation rates to accelerate in the first quarter of 2026, potentially eroding profit margins and free cash flow in the short term.

Looking across the entire tech industry, Google isn’t the only one spending heavily. Microsoft, Meta, and Amazon are all investing heavily in computing power, building data centers, and developing their own chips. The market generally expects these tech giants to invest over $500 billion this year in AI-related infrastructure and R&D. This AI race has entered a phase of “showing off their resources.”