Alphabet says capital spending could double to $235b amid Al race

Alphabet said on Feb 4 that capital expenditure could nearly double in 2026, in yet another aggressive spending ramp-up by the Google parent as it deepens investments to push ahead in the artificial intelligence (AI) race.

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Alphabet shares were volatile in after-hours trading, falling 6 per cent before recouping losses, as investors weighed the swell in spending against surging revenue and profit, both of which beat expectations in the December quarter.

The company said it was targeting capital expenditure of between US$175 billion and US$185 billion (S$235 billion) in 2026, a massive jump compared with analysts’ average expectations that it would spend about US$115.26 billion, according to data compiled by LSEG.

Chief executive Sundar Pichai said in a statement that Alphabet hiked its forecast spending “to meet customer demand and capitalise on the growing opportunities we have ahead of us”.

“We are seeing our Al investments and infrastructure drive revenue and growth across the board,” he added.

The company spent US$91.45 billion in 2025, primarily on Al infrastructure, including servers, data centres and networking equipment. That compares with its projections for total spending of between US$91 billion and US$93 billion in 2025.