Google's parent company, Alphabet (GOOGL), announced plans to invest $75 billion in capital expenditures in 2023, joining other major tech companies in ramping up spending on artificial intelligence infrastructure. During the fourth-quarter earnings call, CFO Anat Ashkenazi indicated that most of this investment would focus on enhancing technical infrastructure, particularly servers and data centers, with an anticipated expenditure of $16 billion to $18 billion in the first quarter. CEO Sundar Pichai emphasized that this investment was essential to meet the soaring demand for AI, noting that Google Cloud customers are using more than eight times the computing capacity compared to 18 months ago. This announcement follows similar commitments from Meta (META) and Microsoft (MSFT), which recently pledged tens of billions toward capital expenditures to expand their AI infrastructure. Just last week, Meta declared intentions to invest between $60 billion and $65 billion this year, while Microsoft plans to allocate $80 billion to infrastructure in its 2025 fiscal year. These substantial capital investments coincide with rising competition from Chinese companies such as the AI startup DeepSeek, which Bank of America analysts claim could represent "AI's Sputnik moment. " The analysts suggested that DeepSeek's development of an AI model comparable to American alternatives at a significantly lower cost could motivate U. S. giants like Alphabet, Microsoft, and Amazon (AMZN) to increase their AI spending.

Amazon is expected to release its fourth-quarter earnings after the market closes on Thursday. Increased AI investments from Alphabet and its counterparts may benefit chip manufacturers like Nvidia (NVDA), which was mentioned by Pichai during Alphabet's earnings call. He stated that Alphabet aims to maintain its "strong relationship" with Nvidia after recently announcing its first customer utilizing Nvidia's Blackwell platform.