Alphabet President and CIO Ruth Porat said the company is spending approximately $200 billion in 2026 to build out its artificial intelligence capacity. She expects capital expenditures to increase significantly next year.
Speaking at Fortune's Most Powerful Women Summit, Porat said the investments are aimed at long-term growth. She added that high demand continues to leave Alphabet constrained by available computing capacity.
Porat argued that strong demand for computing resources and AI tools from businesses and governments points to a clear path to profitability. The spending contributed to negative free cash flow in the second quarter, the first time Alphabet had reported a negative figure in more than 20 years.
Alphabet's Google Cloud division has recorded significant revenue and profit growth.