Dive Temporary:
- Google plans to extend capital investments to $75 billion this 12 months in an effort to develop its AI and cloud capability, CEO Sundar Pichai mentioned Tuesday within the firm’s This autumn 2024 earnings report. The corporate spent $52.5 billion in capital expenditures in 2024.
- Google will direct the vast majority of its rising CapEx to relieving capability bottlenecks by upgrades to infrastructure, together with cloud servers and information facilities, CFO Anat Ashkenazi mentioned throughout a Tuesday earnings name.
- “We exited the 12 months with extra demand than we had accessible capability,” Ashkenazi mentioned. “We’re in a decent provide demand state of affairs, working very exhausting to carry extra capability on-line.”
Dive Perception:
Large AI infrastructure investments are the brand new regular in cloud. Capability constraints are a typical theme, too.
Microsoft promised in January to spend $80 billion on AI-enabled information facilities throughout its present fiscal 12 months and mentioned it was vexed by energy and capability shortages throughout the ultimate quarter of final 12 months.
Amazon, which stories earnings Thursday, was projected to spend $75 billion on capital investments final 12 months, the vast majority of which was to “assist the rising want for expertise infrastructure,” CFO Brian Olsavsky mentioned throughout an October earnings name.
“We’ve extra demand that we may fulfill if we had much more capability right this moment,” Amazon CEO Andy Jassy mentioned throughout the name. “Just about everybody right this moment has much less capability than they’ve demand for, and it is actually primarily chips which might be the realm the place corporations may use extra provide.”
Pichai touted features in information heart effectivity by Google’s deployment of in-house TPU chips and AI Hypercomputer structure Tuesday. “We develop each part of our expertise stack, together with {hardware}, compilers, fashions and merchandise,” he mentioned. “This strategy permits us to drive efficiencies at each degree from coaching and serving to developer productiveness.”
As information heart building progressed, Google Cloud noticed fourth quarter revenues develop 30% 12 months over 12 months to $12 billion. Cloud section revenues for the total 12 months have been up 31% to $43.4 billion.
The corporate plans to speculate roughly $16 billion to $18 billion in capital expenditures throughout the first quarter, based on Ashkenazi.
