Alphabet doubled down on its generative AI bet on Wednesday, reaffirming that it would invest roughly $75 billion this year to expand data center capacity, despite the fact that the payout is still uncertain and that a global trade war could drive up costs.
The chips and servers would make up investment money to burnish the core offerings, including Search, while allowing the development of services such as its Gemini AI model, said CEO Sundar Pichai at the annual conference for Google’s cloud computing arm.
The investments will be beneficial for the company’s enterprise customers, he asserted, and ‘the opportunity with AI is as big as it can possibly be.‘
“We basically want to get advances in the hands of both the enterprises and of consumers.“
Shares in Alphabet closed more than 9 percent higher on Wednesday after major highs in markets following U.S. President Donald Trump’s announcement to temporarily cut his recently imposed high tariffs on dozens of countries while ramping up pressure over tariffs with China.
In February, Alphabet had outlined the use for its $75 billion outlay. Wall Street analysts were expecting 29% less than what was achieved by the target.
Investors have got more and more restless over big investments pouring hundreds of billions into building artificial intelligence infrastructure in the country, but tech companies’ big bucks are big bets with no guarantees of quick returns.
In a LinkedIn post Tuesday, rival Microsoft’s president of cloud operations and innovation Noelle Walsh said that this year Microsoft expects to spend more than $80B continuing to build out a datacenter infrastructure which made those investments guided by near term, and long term signals.
Meta Platforms has stated that the corporation will invest up to $65 billion this year to enhance its AI infrastructure.
AI investments have increased significantly since OpenAI released ChatGPT in 2022. Businesses are competing to dominate generative AI technologies in order to diversify their revenue streams and improve their goods.
