Google parent raises full-year capital expenditure guidance amid surging AI infrastructure demand and record cloud contract backlog.
Alphabet increased its full-year capital expenditure guidance to as much as $205 billion, up from prior projections, during the same quarter its Google Cloud backlog hit a record $514 billion. The company cited accelerating demand for artificial intelligence infrastructure as the primary driver behind the elevated spending plans.
The $514 billion cloud backlog reflects customer commitments for future services, while the $205 billion capex guidance underscores Alphabet’s push to expand data center capacity, servers, and custom AI chips. Roughly 60% of recent capital outlays targeted compute hardware, with the remainder allocated to facilities and networking.
Analysts note the capex increase is necessary to convert existing cloud contracts into revenue, particularly as AI workloads grow. The company’s investment in Tensor Processing Units and GPUs aims to meet rising enterprise demand for generative AI tools.