Google’s $75B Capex for 2025 is Mainly Set Aside for AI
Google CEO Sundar Pichai plans to invest approximately $75 billion in capital expenditures for 2025, a 43% increase from the company’s $32.3 billion in 2023, with AI expected to be the primary focus.
Pichai said in a statement in Google parent Alphabet’s fourth-quarter 2024 earnings report:
“We expect to invest approximately $75 billion in capital expenditures in 2025.”
He emphasized that the investment will accelerate AI advancements while strengthening Google’s core businesses.
Though the exact AI allocation remains undisclosed, the majority is likely earmarked for expanding AI infrastructure.
This move aligns with broader industry trends, as Meta has also announced a $65 billion investment to scale its AI capabilities.
Alphabet’s Revenue Dropped
AI has been a major revenue driver for Google, contributing to a 12% year-over-year increase, bringing total revenue to $96.5 billion.
Google Cloud revenue also saw a 10% rise to $12 billion, fuelled by steady growth in AI infrastructure, core cloud products, and generative AI solutions.
However, Alphabet’s total revenue narrowly missed analyst projections of $96.7 billion, leading to a 7% drop in its share price after hours, according to Yahoo Finance. https://finance.yahoo.com/quote/GOOG/
During a 4 February investor call, Pichai downplayed competitive threats, including China-based AI model DeepSeek, which disrupted the market in January.
He emphasized that Google’s Gemini 2.0 Flash models rank among the most efficient, even when compared to DeepSeek’s latest iterations.