Alphabet lifts 2026 AI capital spend to $205 billion

Alphabet Inc., the parent company of Google, has significantly increased its capital expenditure forecast for 2026, signaling a massive acceleration in its investment in artificial intelligence infrastructure. The company now plans to spend between $195 billion and $205 billion this year, up from a previous estimate of $180 billion to $190 billion. The announcement, made during an earnings call on July 22, follows a quarter in which the company's free cash flow turned negative for the first time in its history as a public company.

The increased spending is a direct response to surging demand for AI computing capacity. Chief Financial Officer Anat Ashkenazi stated that despite significant capacity expansion over the past three years, demand continues to outpace investment. She explained that customers are requesting more AI infrastructure than is currently available, prompting the company to accelerate its investment timeline. Executives also indicated that capital expenditures are expected to increase significantly again in 2027.

The aggressive investment is underpinned by explosive growth in Google Cloud, which saw revenue soar 82% year-over-year to $24.77 billion in the second...