Google presses ahead with AI spend as Trump calls for – yet charges – more
Donald Trump is urging American firms to ramp up their technology spending, particularly on AI, despite his latest wave of tariffs injecting new uncertainty into global supply chains.
Google owner Alphabet is answering that call, reaffirming plans to spend $75bn this year on AI, brushing aside investor concerns and trade headwinds.
The move, announced at Google Cloud’s annual conference on Wednesday, underscores how central AI has become to the strategies of big tech – even amid rising geopolitical and economic turbulence.
Chief executive Sundar Pichai, in a rare appearance, said the spending will go toward custom chips, data centre infrastructure, and servers that power products like Google search and its Gemini AI models.
“The opportunity with AI is as big as it gets”, Pichai said.
Mixed messages
Trump, who imposed an influx of tariffs this week on a range of countries, while vowing to augment pressure on China, has also been calling on both public and private sectors to outspend rivals in the AI race.
His mixed messaging – spend more, but pay more for it – has left the market on edge.
Sachin Gupta, head of Google Cloud infrastructure, acknowledged that tariffs could raise hardware costs, but said customer demand justifies the investment.
“We’re all processing what’s happening with the tariffs”, he told Reuters.
Alphabet’s capex plans, first laid out in February, caught Wall Street off guard with a figure nearly 30 per cent above expectations.
But on Wednesday, the market rallied behind the move, with Alphabet shares up nearly 10 per cent, contributing to a $1.5tr surge in tech stock value across the magnificent seven.
Google isn’t alone. Microsoft also reiterated this week that it will spend over $80bn on AI in 2025, while Meta is set to spend around $65bn.
“Early success from customers who’ve chosen Google Cloud is reinforcing the case for aggressive investment”, said Chiraj Mehta, principal analyst at Constellation Research.