Google Hikes Capital Expenditures to $205 Billion, Citing Demand Growth

Google announced plans to increase its capital expenditures to $205 billion for the 2026 fiscal year, up from earlier estimates of up to $190 billion, driven by surging demand for compute capacity, particularly for AI infrastructure. CFO Anat Ashkenazi stated the company remains in a supply-constrained environment despite significant capacity increases over the past three years. Google Cloud revenues rose 82% in Q2, fueled by enterprise AI products and infrastructure, including first-time revenue from tensor processing unit systems deployed to customer data centers. The investment aligns with a broader trend among tech giants to expand data center capacity, with U.S. data center capacity expected to double in three years. Separately, the European Commission fined Google €890 million ($1.01 billion) for non-compliance with the Digital Markets Act, citing self-preferencing in search results.