David Edwards
According to Google CEO Sundar Pichai, the internet behemoth intends to expand its capital expenditures (capex) investment by 43% to around $75 billion in 2025 from its $32.3 billion investment in 2023.
The investment, which was revealed in Alphabet’s Q4 2024 financial release, aims to support Google’s core businesses and accelerate artificial intelligence (AI) innovation. Although Pichai did not say how much of the funding is specifically for AI, it is anticipated that the bulk will go into expanding AI infrastructure, which is in line with larger trends among Big Tech companies.
The AI Investment Race in Big Tech
Google’s expenditure boom coincides with growing competition in the field of artificial intelligence. Plans to invest $65 billion on Meta’s AI infrastructure have previously been made public. Google reported a 12% year-over-year revenue growth to $96.5 billion, with Google Cloud revenue increasing 10% to $12 billion, as AI emerges as a major income driver.
Reaction of the Stock Market and Investor Concerns
According to Yahoo Finance, Alphabet’s share price fell 7% in after-hours trading as its total earnings fell short of analyst projections of $96.7 billion, despite the company’s revenue growth.
Pressures from New AI Players to Compete
Concerns about new AI rivals, especially China-based DeepSeek, which made headlines in January for creating a competitive AI model on a shoestring budget of less than $6 million utilizing less expensive Nvidia technology, were discussed by Pichai on an investor call on February 4.
Even when compared to DeepSeek’s v3 and R1 models, Pichai reassured investors that Google’s Gemini 2.0 Flash models are still among the most effective AI models on the market. But DeepSeek’s quick progress has sparked worries about American tech companies’ hegemony in AI.
