Google continues to invest $75 billion in AI, despite macroeconomic uncertainty
The company is satisfied with its performance after publishing its quarterly report.
The company is satisfied with its performance after publishing its quarterly report.
Alphabet CEO Sundar Pichai said that the investment will focus primarily on building data center capacity as an artificial intelligence infrastructure, Business Insider reports .
Immediately after the company published its first-quarter 2025 earnings report, which beat expectations, Alphabet shares rose more than 4% after the close of trading.
According to Alphabet's quarterly report, the company's total operating expenses increased by 9% to $23.3 billion compared to the first quarter of 2024, while investment in research and development increased by 14%, driven by increased compensation and depreciation expenses.
In response to more optimistic results, Alphabet announced plans to invest about $75 billion in artificial intelligence development and infrastructure improvements by 2025.
“We are obviously not immune to the macro environment. However, we have a lot of experience in managing in times of turbulence, so we remain focused on helping our customers,” said Philip Schindler, Google’s chief business officer, when asked about the impact of tariffs during a call with investors.
Nikhil Lai, a senior performance marketing analyst at Forrester, told Business Insider that the possibility of stagnant inflation due to Trump's tariffs could "reduce Google's ad revenue" over the next few quarters.
“Shein and Temu will spend a lot less on Google than they did before the tariffs — that will have a significant impact on Google’s bottom line,” Lai said. “Every global retail supply chain will become more expensive; I don’t think they will be able to pass on those additional costs to consumers.”
Google's main competitors have previously announced significant cuts in investment in the development of artificial intelligence data centers. For Amazon, the key decision was the significant costs of electricity that these data centers will consume, while Microsoft canceled a $1 billion deal due to the inability of local officials to negotiate.
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