DeepSeek crashed Nvidia’s stock last week based on speculation that its cheaper AI models would dramatically decrease Big Tech’s spending on things like data centers and GPUs.
But Alphabet has joined Meta in doubling down on AI spending, pledging to spend $75 billion on capital expenditures this year to accelerate its AI ambitions — well over analyst estimates of $59 billion.
“We are confident about the opportunities ahead, and to accelerate our progress, we expect to invest approximately $75 billion in capital expenditures in 2025,” CEO Sundar Pichai said during the company’s earnings results.
Alphabet spent about $52 billion in capex for 2024, according to Reuters, so the new number represents a huge 42% increase.
Both Meta and Alphabet are betting that cheaper AI will massively boost demand for their services, rather than making it basically free for everyone and threatening their business models.
