Alphabet, the parent company of Google, saw its shares slide 9% after-hours on Tuesday following weak sales from its cloud unit and despite announcing a significant investment in artificial intelligence (AI). The tech giant plans to spend $75 billion on AI this year, exceeding Wall Street’s expectations. However, investors are growing impatient with profitability concerns.
Google CEO Sundar Pichai defended the massive spending plan during a conference call with analysts, citing efficiency gains from its Gemini family of AI models. He claimed that the cost of using AI will continue to decrease. The news has raised questions about the competitiveness of US tech firms, including Google, in the face of low-cost rivals like China’s DeepSeek.
DeepSeek, a Chinese AI firm, reportedly spent $6 million on training its AI model, while Alphabet plans to spend up to $18 billion in the first quarter alone. This significant investment is part of Alphabet’s infrastructure development to support AI research and integration into products such as search and cloud services.
Source: https://finance.yahoo.com/video/alphabet-shares-tumble-revenue-miss-044737187.html