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, on 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 offering.
“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.
On its earnings call, Alphabet said it expects $16 billion to $18 billion of those expenses to come in the first quarter. Overall, the expenditures will go toward “technical infrastructure, primarily for servers, followed by data centers and networking,” finance chief Anat Ashkenazi said.
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, or 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. Those fears rocked financial markets early last week, spurring a sell-off 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 its implications for U.S.-based tools. Microsoft CEO Satya Nadella said 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.
In addition to infrastructure purchases, Alphabet said it expects headcount growth in 2025 “in key investment areas such as AI and cloud.”
