Google expects to spend $75 billion this year on the AI race

Google parent company Alphabet expects to invest “approximately $75 billion” in capital expenditures in 2025, according to a statement from CEO Sundar Pichai in Alphabet’s Q4 2024 earnings release.

Capital expenditures have become a hot topic as of late as big tech companies race to build infrastructure to support their growing AI ambitions, and today’s announcement from Alphabet is clearly meant to keep the company in that conversation. Alphabet spent $32.3 billion on capital expenditures in 2023, so $75 billion in 2025 would be a big jump. And while Google’s press release today doesn’t specifically say that the upcoming capital expenditures are all for AI, given the amount of money flowing into AI infrastructure across the industry, it seems likely that a good amount of the expense will go toward benefitting Google’s AI work.

AI continues to benefit Google’s business as well. Overall revenues are up 12 percent year-over-year to $96.5 billion. Google Cloud revenues are up 10 percent to $12.0 billion, which Google says is “led by growth in Google Cloud Platform (GCP) across core GCP products, AI Infrastructure, and Generative AI Solutions.” 

On today’s investor call, Pichai said that the company has “very good ideas for native ad concepts” in its Gemini AI assistant. He also teased that Google plans to put new Search experiences “in front of users through the course of 2025.”

During its fourth quarter, the company made some big news about its AI products, including revealing Gemini 2.0, an AI agent called Project Mariner that can complete tasks in a Chrome browser, and its Deep Research tool that can research things on the web for you. It also demoed a new Android XR mixed reality OS.

Alphabet-owned Waymo had a pretty good 2024 overall, though today’s earnings report shows that “Other Bets,” which includes Waymo, had lower revenue and higher losses year-over-year.

In Q4, the Department of Justice also proposed that Google potentially divest itself of Chrome as a remedy for Judge Amit Mehta’s August ruling that the company is a monopolist in the search and advertising markets. The final outcome of those remedies could have a big impact on Google / Alphabet’s future.

Update, February 4th: Added details from Alphabet’s investor call.