Alphabet could buy some pretty huge businesses with the amount of money it plans to spend this year
AI outlays have gone full nut-nut. Even Google, one of the most capital-efficient businesses of all time in its heyday, is spending like there’s no tomorrow.
Hey 𝙶̶𝚘̶𝚘̶𝚐̶𝚕̶𝚎̶ big spender!
As part of Wednesday’s Q4 report, where revenues rose across every division and earnings and sales beat expectations, Alphabet also announced that it expects capital expenditure to hit between $175 billion and $185 billion for the 2026 fiscal year — up from $91.4 billion last year and about $70 billion more than analysts had expected.
This latest forecast is, unquestionably, a hell of a lot of money. In recent years, however, as Alphabet and its Big Tech peers (Apple excluded) have doubled down — and doubled down again — on their artificial intelligence ambitions, soaring capex figures have become as standard a fixture in GOOGL earnings reports as news about how many ads YouTube is showing, or just how well Gemini is doing.
Collectively, the four biggest hyperscalers are expected to spend 50% more in 2026 than in 2025, or: roughly $600 billion on capex, with Amazon yesterday revealing it’s on track to spend the most, putting the figure at some $200 billion. Still, Alphabet’s ~$180 billion estimate perhaps feels a little more shocking because, historically, the company’s core product, Google Search, was so unbelievably capital light, generating billions of profits with little investment.
Indeed, the sum would take Alphabet’s capex bill to almost $390 billion since 2022 — it had spent less than half of that in the 20 years prior.
For context, with the amount that the company is spending on compute capacity for DeepMind and “strategic investment in other bets” this year, it could instead buy:
A company like Uber, with a current market cap of $157 billion, which would leave Alphabet with a decent chunk of change... and maybe an even stronger position in the self-driving car game.
Almost 80% of the teams in the NFL, after the average value for each of the 32 teams was pegged at roughly $7.1 billion last year.
A Brian Niccol coffee-and-burrito combo, given that Starbucks’ market cap at the moment sits around the $110 billion mark, while Niccol’s former company, Chipotle, is worth ~$51 billion.
About 900 new White House ballrooms.
