New year, new budgets. Big tech companies are beginning to detail their roadmap for 2026 and the trend is clear: spend even more on AI. a few days ago, Goal announced that the planned capex (capital expenditure) rose to 135,000 million dollars and Microsoft too pointed to a similar figure. Alphabet (Google) just told everyone to “hold my hands.”
May the rhythm not stop. The bomb was announced during the last results conference. Alphabet plans to spend between $175 and $185 billion, doubling 2025 capex, which was $91.4 billion, and almost quadrupling 2024 spending (52.5 billion). To put it in context, it is more than the GDP of Morocco, Kuwait, Bulgaria and up to 158 countries.
At the same time, the company announced record results, surpassing 400 billion in revenue for the first time. The net profit stood at 132,000 million.
Vertigo. That’s what investors seem to have felt. They count in Financial Times that, in the hours following the news, Alphabet shares fell 7% after the capex announcement, but then the fall was reduced to -1.5%. Microsoft experienced a similar response after its earnings call a few days ago, it is the response of investors to these exorbitant figures. However, as long as the results are good, it seems that the scare will not last long.
Everything’s fine. They count in Fortune that Pichai assured that this year’s capital expenditure is “a look at the future” and justified his strategy by highlighting that the demand for his cloud services and DeepMind (Gemini) is extraordinary, so the investment must also be. He also announced that AI searches now surpass traditional searches and that Google Search’s business has grown 17% compared to last year. Additionally, the order book for its cloud has increased by 55% during the last quarter.
It still won’t be enough. The CEO of Alphabet admitted that, despite the record results, there are insurmountable bottlenecks such as computing capacity, problems in the chip supply chain and energy limitations. These restrictions make it take a long time to get a data center up and running, or in other words, it was preparing investors not to expect an immediate return.
Gemini, full out. The Google chatbot is in its sweet moment. The viral success of Nano Banana, Gemini 3 sweeping its competition in benchmarks and Apple choosing him as the new brain for the new Siri They have given a boost in popularity to Gemini, which already has more than 750 million users. OpenAI is still ahead with ChatGPT, but Google is closing the gap and Altman’s people have reacted going into panic mode.
He moat of Gemini. Benchmarks are fine, but there is something much more important. During the conference, Pichai announced that they had reduced Gemini’s service costs by 78% “through model optimizations, efficiency and utilization improvements.” It is no longer that its AI is surpassing its competition, it is that it is cheaper and there OpenAI does have a problem. With its advertising businesses, the cloud and more revenue, Google has plenty of room to skyrocket its capex.
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