Alphabet plans to boost AI-related capital spending beyond $200 billion, says President Porat
Ruth Porat said Alphabet will increase its AI-focused capital expenditures beyond $200 billion this year and raise the budget further next year.
Speaking at the Fortune Most Powerful Women Summit in Santa Barbara, Alphabet President and chief investment officer Ruth Porat disclosed that the company is allocating roughly $200 billion this year to expand its AI capabilities, with plans for an even larger capital-expenditure budget next year. She said the surge in compute demand from enterprise and government customers has left the firm "capacity constrained," prompting a focus on building out data-center capacity.
Recent quarterly results showed $44.9 billion in capex, mainly for AI infrastructure, which pushed free cash flow to a negative $5.9 billion for the first time in over two decades, while Google Cloud revenue rose 82% to $24.8 billion. Porat rejected Jefferies analyst Chris Wood’s warning that open-source Chinese AI models could trigger a capital bust, arguing that sustained demand and responsible deployment will drive long-term returns. She also emphasized addressing community concerns about data-center construction by investing in renewable energy and workforce training through partnerships with Ford, BlackRock, and Carhartt.
Why it matters
Alphabet's huge AI outlay could reshape tech competition and impact broader economic and energy trends.
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