After surpassing OpenAI and partnering with Apple AI, Google is firing on all cylinders: capital expenditures will double to $185 billion by 2026.

Blue Whale News, February 5 — (Reporter Zhu Junxi) After successfully securing a major AI order from Apple and a new generation of models prompting OpenAI to sound the “red alert,” the rapidly growing Google has not hesitated to increase its investment in the AI field. On February 5, during the Q4 and full-year earnings call, Google’s parent company Alphabet projected that capital expenditures in 2026 will range between $175 billion and $185 billion. This total exceeds Alphabet’s combined spending over the previous three years and is nearly twice the $91.4 billion spent in 2025.

Over the past week, the seven major U.S. tech giants have disclosed their latest financial reports and spending plans. This year, companies like Microsoft, Google, Meta, and Amazon are expected to invest over $500 billion in AI. Meta forecasts that capital expenditures in 2026 will be between $115 billion and $135 billion, representing an approximately 87% increase at the upper end compared to 2025. Microsoft’s quarterly spending also surged nearly 66% year-over-year to $37.5 billion, setting a new record.

In the fourth quarter ending December 31, 2025, Alphabet’s capital expenditures reached $27.9 billion. According to CFO Anat Ashkenazi, the vast majority of this spending was directed toward technological infrastructure, with about 60% allocated to servers and 40% to data centers and network equipment. She added that the proportion is expected to be roughly the same in 2026. These funds will be used to increase AI computing power to support the development of cutting-edge models at Google DeepMind; improve the return on investment for Google service advertisers; meet significant customer demand for cloud services; and invest in other strategic areas.

Alphabet CEO Sundar Pichai stated during the call that the company is likely to remain in a state of constrained computing capacity this year, with strong demand across various services, including investments to support future work at Google DeepMind and cloud business development. “Currently, the most critical issue is capacity, including all constraints such as power, land, and supply chain—how do we increase capacity to meet this unprecedented demand?” he emphasized. He highlighted that ensuring long-term investment focus and executing with improved efficiency to reach world-class standards are his priorities.

By segment, Google Cloud’s revenue in Q4 reached $17.7 billion, a 48% year-over-year increase, marking the fastest growth in over four years and significantly surpassing Microsoft’s Azure for the first time in several years. In the global cloud services market, Google Cloud ranks third, behind Amazon AWS and Microsoft Azure. Alphabet management stated during the call that the revenue growth of cloud services was mainly driven by the strong performance of Google Cloud Platform, fueled by robust demand for enterprise AI products.

In Q4, Google advertising revenue grew 13.5% year-over-year to $82.3 billion, accounting for 72% of total revenue. The primary revenue driver remains search, generating $63.1 billion. Google has integrated its most advanced Gemini 3 model into numerous products, including Google Search and Chrome browser. Management noted that these integrations have expanded the types of queries users make on Google, and there is currently no evidence that search traffic is being cannibalized by Gemini applications.

Google Senior Vice President and Chief Business Officer Philipp Schindler stated that Gemini App is still focused on the free and subscription versions, but advertising remains an important means of scaling the product and reaching billions of users. “If used properly, advertising can become truly valuable and useful business information.” He added, “When the time is right, we will share relevant plans, but there is no rush at the moment.”

The earnings report showed that Alphabet’s total revenue in Q4 was $113.8 billion, up 18% year-over-year, beating analysts’ expectations of $111.4 billion. Adjusted earnings per share were $2.82, also higher than the expected $2.63.

In November last year, Google launched the new generation large model Gemini 3, which scored higher than OpenAI’s GPT-5.1 model in multiple evaluation benchmarks. To counter Google’s impact, OpenAI CEO Sam Altman issued a “red alert” to employees, urging delays in advertising and other projects to mobilize more resources to improve ChatGPT. Soon after, OpenAI released GPT 5.2 in mid-December.

Google and OpenAI have also been competing for AI collaborations with Apple. In January, Google and Apple jointly announced a multi-year partnership, where Apple’s next-generation foundational model will be based on Google Gemini and cloud technology to support future Apple smart features. The statement noted, “After careful evaluation, Apple has determined that Google’s AI technology provides the most powerful foundation for Apple’s foundational models and is excited about the innovative experiences it will bring to Apple users.”

Following the latest earnings release, Alphabet’s stock experienced volatile trading after hours, dropping as much as 6%, before narrowing to a decline of 0.41%. Year-to-date, the stock has gained 5.71%, with the company’s market capitalization reaching $4.02 trillion.