That showed in the confident tone executives struck on the post-earnings call, the first since Alphabet released the Gemini 3 model. But its shares fell 3% on Wednesday after the company said it would spend up to $185 billion this year, deepening investor scrutiny as the expenditure potentially more than doubles from 2025 and eclipses rivals, Meta and Amazon.<\/p>\n
<\/p>\n
“We’re quickly getting to north of a trillion dollars in combined 2026 investment across the mega caps if we consider both capital expenditure and associated resourcing needs,” Bernstein Analyst Mark Shmulik said.<\/p>\n
“For that trillion to pay off suggests the total addressable market for AI-driven products and enhancements needs to be multiples of that very quickly.” For now, the AI spending is reaping returns, and its shares remain more than 80% higher in the past 12 months, even with Thursday’s decline.<\/p>\n
Alphabet’s prepared remarks about AI in 2025 had focused on product usage and AI revenue generated specifically via its cloud-computing unit. Cloud unit revenue surged 48% in the December quarter. That came as Wall Street’s has sent a stark message to tech companies: Soaring AI spending can continue only if tech companies demonstrate commensurate financial returns.<\/p>\n
“Overall, we’re seeing our AI investments and infrastructure drive revenue and growth across the board,” Chief Executive Officer Sundar Pichai said.<\/p>\n
–Reuters–<\/p>\n
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