Key Points
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Big tech companies are investing heavily in AI infrastructure.
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Alphabet boasts advantages such as financial strength, custom AI chips, and diverse revenue streams.
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Google Gemini is emerging as a significant player in the large language model market.
Tech giants are ramping up artificial intelligence (AI) investments, with notable spending plans revealed in recent quarterly reports. Meta has increased its capital expenditure guidance for 2026 by 73%, while Microsoft reported over $200 billion spent on AI since the start of its fiscal year 2024. Amazon similarly announced a 52% increase in its capex guidance for 2026, totaling $200 billion. Alphabet, Google’s parent company, plans to allocate $175–185 billion for capital expenditures in the upcoming year.
The escalating costs of data centers drive this spending, estimated to range from $1.4 billion to $2.4 billion for a modern hyperscale data center, with annual operating expenses between $10 million and $25 million. For the fiscal year 2025, Alphabet achieved $402.8 billion in revenue, a 15% increase from 2024, with a net income growth of 32%. Its Google Gemini AI program has also grown its market share from 7% to 21% in the enterprise large language model market, highlighting its competitive edge over peers.
