Google parent set to double 2026 spending to $185 billion amid intensifying AI race

Alphabet CEO Sundar Pichai

• Alphabet to double capital spending to up to $185B in 2026 for AI investments
• Google Cloud revenue jumped 48 percent to $17.7B in Q4 2025
• Gemini app now has over 750 million monthly active users

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Google parent Alphabet aims to double its capital spending in 2026 as the tech giant seeks to stay ahead in the intensely competitive artificial intelligence (AI) arms race.

The company plans to invest $175 billion to $185 billion in capital expenditures in 2026, chief executive Sundar Pichai said, double the $91.5 billion it spent last year.

Pichai noted that this spending surge is to "meet customer demand and capitalize on the growing opportunities we have ahead of us. We’re seeing our AI investments and infrastructure drive revenue and growth across the board."

Last week, Facebook parent Meta had also signalled a massive escalation in its AI spending, projecting capex of $115 billion to $135 billion for 2026, nearly double the $72 billion it spent last year.

Where will the investments go?

During the company's earnings conference call on February 4, Alphabet CFO Anat Ashkenazi said that the tech giant will be investing in AI compute capacity.

This infrastructure will support frontier model development by Google DeepMind, along with ongoing efforts to improve the user experience, drive higher advertiser ROI across Google services, as well as strategic investments in other bets.

This aggressive investment comes on the back of the strong revenue growth the company is witnessing, particularly in its Google Cloud business, which saw revenue jump 48 percent to $17.7 billion in Q4 2025. The growth was led by an increase in Google Cloud Platform (GCP) across enterprise AI infrastructure and enterprise AI solutions, as well as core GCP products.

Alphabet's annual revenue crossed the $400 billion mark for the first time, reaching $402.8 billion in sales in 2025.

Also Read: Google India's gross FY25 ad revenue rises 11.3% to Rs 34,742 crore

Google's AI comeback

In recent months, Google has pulled ahead in the AI race, as it mounted a strong comeback with powerful frontier models like Gemini 3 topping major AI benchmarks. Products such as NotebookLM, Google Beam, and Flow, alongside features like Nano Banana image generation, have also attracted significant attention and user engagement.

"The launch of Gemini 3 was a major milestone and we have great momentum. Our first party models, like Gemini, now process over 10 billion tokens per minute via direct API use by our customers," Pichai said.

Also read: How Google reclaimed the AI crown

Gemini app now has over 750 million monthly active users, up from 650 million monthly active users in October.

Google-Apple partnership

Last month, Google also struck a multi-year partnership with Apple under which the next generation of Apple Foundation Models will be based on Google's Gemini models and cloud technology. These models are expected to help power future Apple Intelligence features, including a more personalized Siri coming later this year.

Pichai said that Google Cloud is now on an annual run rate of $70 billion and the service's backlog grew 55 percent to $240 billion, representing a "wide breadth" of customers, driven by demand for AI products.

Alphabet reported total revenue of $113.8 billion for the quarter, up 18 percent year-on-year. Google Services revenues increased 14 percent to $95.9 billion, led by 17 percent growth in Google Search, 17 percent rise in Google subscriptions, platforms, and devices, and 9 percent increase in YouTube ads.

The company's operating rose by 16 percent to $35.9 billion while net income grew 30 percent to $34.5 billion for the quarter.

Pichai said Google now has over 325 million paid subscriptions across consumer services, led by strong adoption for Google One and YouTube Premium.