Alphabet raises 2026 capex to $195B-$205B for AI buildout

Alphabet has raised its expected annual capital expenditure to between $195 and $205bn, increasing its prior forecast of $180-190bn as it pushes ahead with AI data center development.

The updated spending plan marks a $15 billion increase from the company’s last-quarter prediction. The company’s capex reached $91.45bn last year, up from $52.5bn the year before.

"We have increased our capacity quite significantly over the past three years. The demand still outpaces that investment", CFO Anat Ashkenazi said on an earnings call.

The higher spending outlook came as Alphabet reported 2026 second-quarter earnings of $119.8 billion, up 24 percent over the prior quarter. Google Cloud posted $24.8bn in revenue, which the company said was a new record for the cloud division and up 82 percent over last year.

Google also said it had begun recognizing revenue from standalone sales of its AI chip family, the TPU.

Despite the revenue growth, Alphabet shares fell three percent in after-hours trading as investors reacted to the rising costs tied to AI data center development.

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