Alphabet's AI Investment Surge

Alphabet has reported better-than-expected Q2 results, driven by growth in its cloud and search businesses. Revenue reached $96.4 billion, surpassing analysts' estimates. Google Cloud revenue specifically saw a 32% increase. In response to this growth and the increasing demand for AI infrastructure, Alphabet is increasing its capital expenditure for 2025 to $85 billion.

The increased investment will be focused on expanding AI capabilities and data centre infrastructure. CEO Sundar Pichai stated that AI is positively impacting all parts of the business. Alphabet is investing heavily in AI to compete with other major players in the tech industry.

This move highlights the escalating AI race among technology giants. Alphabet's substantial investment aims to solidify its position in the AI era. The company is counting on its core search advertising and growing cloud computing business to support its AI spending.