Sundar Pichai, CEO of Google and Alphabet Inc., speaks at the inaugural 2024 Business, Government, and Society Forum at the Stanford Graduate School of Business in Stanford, California, U.S., April 3, 2024.
Carlos Barria | Reuters
Alphabet CEO Sundar Pichai said the company is planning another big year of spending as it continues to build out its artificial intelligence tools and core businesses.
“We are confident about the opportunities ahead, and to accelerate our progress, we expect to invest approximately $75 billion in capital expenditures in 2025,” Pichai said in Tuesday’s earnings release announcing the investment plan.
The capex figure came in ahead of the $59.73 billion consensus estimate for Google, according to Visible Alpha.
Alphabet’s announcement came alongside a mixed fourth-quarter earnings report. Shares fell 8% after the company topped Wall Street’s earnings estimates by 2 cents per share, but fell short on revenue expectations.
Alphabet and its megacap tech rivals are rushing to build out their data centers with next-generation AI infrastructure, packed with Nvidia’s graphics processing units (GPUs). Last month Meta said it plans to invest $60 billion to $65 billion this year as part of its AI push. Microsoft has committed to $80 billion in AI-related capital expenditures in its current fiscal year.
The recent rise of China’s DeepSeek open-source models has led to some concerns about whether companies need to invest as heavily in their buildouts. These fears rocked financial markets last week, spurring a selloff that contributed to the worst one-day market value loss for a company in history.
Many technology CEOs have called attention to the Chinese startup and it implications for U.S.-based tools. Microsoft CEO Satya Nadella said that DeepSeek is showing “real innovations,” while Palantir CEO Alex Karp told CNBC last week that competing AI models means the U.S. needs an “all-country effort” to develop the technology faster.
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