Google Cloud ups capex to $10 billion on cloud-demand surge

Google Cloud ups capex to $10 billion on cloud-demand surge
Photo by Łukasz Łada / Unsplash

Fierce Wireless covers Alphabet’s increase in investment Google Cloud investment by an additional $10 billion for capital expenditures in 2025, for a total of $85 billion, as demand for cloud and AI infrastructure accelerates. This expansion, noted in Alphabet’s Q2 2025 earnings call, is a direct response to a rapidly growing backlog (not yet fulfilled customer commitments), which jumped 38 percent year-over-year to $106 billion.

Anat Ashkenazi, Alphabet’s CFO, noted that the capital spend surge will focus on server procurement and accelerated data center construction. Despite efforts to add capacity, Ashkenazi said that tight supply conditions will likely linger into early 2026, reflecting industrywide constraints on data center growth due to hardware shortages and electricity supply issues.

Google Cloud’s Q2 revenue grew 32 percent to $13.6 billion, with operating income more than doubling to $2.8 billion. Sundar Pichai, Alphabet’s CEO, also highlighted continued growth in AI: the company’s AI is now processing over 980 trillion tokens monthly, and new cloud customer sign-ups grew 28 percent quarter-over-quarter.

In line with wider environmental commitments, Google recently committed $3 billion to a hydropower deal with Brookfield Renewable, aiming to secure cleaner energy for its expanding data center footprint. However, analysts caution that while such deals support sustainability, they may tighten local power markets and do not directly increase renewable generation.