Alphabet, the parent company of Google, announced that its free cash flow turned negative at $5.9 bn (£4.3 bn) for the first time in at least a decade. The figure followed a surge in spending on artificial‑intelligence (AI) infrastructure, a strategy that the company says is “still outpacing” investment.
The firm plans to spend up to $205 bn on AI next year, up from $190 bn in 2025, as it builds new AI capabilities. It also reported a 23 % rise in quarterly revenue that hit $119.8 bn, yet its stock fell 4 % in after‑hours trading.
During a conference call, CEO Sundar Pichai said the move toward AI is “early innings” and the company remains disciplined in looking for returns. CFO Anat Ashkanazi said the company spent $45 bn in the second quarter alone, with 60 % allocated to servers and 40 % to data centres.
Alphabet’s investments mirror a wider trend in high‑tech firms. Tesla, for instance, also posted a negative free‑cash‑flow figure of $1.1 bn for Q2 and plans to spend as much as $25 bn on AI and other capital projects this year.
