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The announcement places Alphabet alongside other major technology firms increasing AI infrastructure investment, with Microsoft planning to invest over $80bn in 2025 and Meta Platforms projecting up to $65bn in spending.
The investment plan, initially disclosed in February, exceeded earlier analyst projections by 29%. (Photo: Shutterstock)
Google’s parent company Alphabet has reconfirmed its commitment to invest $75bn in 2025 to expand its data centre infrastructure, despite uncertainty surrounding US tariffs. The announcement comes as investors express concern over the high costs associated with AI infrastructure and the potential impact of trade policy shifts, Reuters reported.
Speaking at the Google Cloud Next conference, Google CEO Sundar Pichai stated that the funding will support the procurement of chips and the construction of servers to strengthen Alphabet’s core services, including Google Search. It will also help in advancing AI initiatives such as its Gemini model, he added.
The investment plan, initially disclosed in February, exceeded earlier analyst projections by 29%. Google Cloud infrastructure executive Sachin Gupta told Reuters that tariffs may raise the cost of importing hardware, however, the demand for AI and cloud services continued to drive the need for increased spending.
The announcement aligns Alphabet with other major tech firms investing heavily in AI infrastructure. Microsoft recently reiterated plans to invest over $80bn in 2025, while Meta Platforms has projected spending of up to $65bn.
Google unveils new AI chip and Gemini 2.5 Flash model
At the conference, Google introduced its seventh-generation AI chip Ironwood, which is intended to enhance the speed and efficiency of AI applications. Designed for inference computing, Ironwood will support rapid data processing in use cases such as chatbot responses. The chip is expected to be released later in 2025.
“Compared to our first publicly available Tensor Processing Unit (TPU), Ironwood achieves 3,600 times better performance,” said Pichai. “It’s the most powerful chip we’ve ever built and will enable the next frontier of AI models.”
The tech major also unveiled Gemini 2.5 Flash, a new variant of the company’s AI model designed to offer lower latency and more cost-efficient performance. The model will be available through Google AI Studio, Vertex AI, and the Gemini app. This follows the recent release of Gemini 2.5, the company’s latest large-scale multimodal AI model.
In the fourth quarter of 2024, Alphabet reported consolidated revenue of $96.5bn, up 12% from the same period the previous year. Google Services contributed $84.1bn, a 10% increase driven by continued growth in Search, YouTube, and other advertising segments. Google Cloud revenue rose 30% year-on-year to $12bn, supported by increased adoption of Google Cloud Platform, AI infrastructure, and generative AI offerings.
Read more: Google to bolster cloud security capabilities with $32bn Wiz acquisition
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