(Alain Jocard/Getty Images)

Unpacking Alphabet’s $75 billion capex plans

A spending spree on data centers, custom chips, and undersea cables.

2/5/25 12:11PM

Investors were disappointed with Alphabet’s Q4 earnings yesterday, evidenced by the stock’s subsequent tumble.

While Alphabet delivered fairly strong earnings, the issue was a slowdown in revenue growth. Sales grew 12% from Q4 2023, which is far below last quarter’s 15% growth rate.

But there were some interesting details from the earnings call. Despite expectations that 2025’s capital expenditures would be a slight bump up from 2024’s $52.5 billion, Alphabet CEO Sundar Pichai told investors that the company has since upped that number to $75 billion. This comes just weeks after Meta CEO Mark Zuckerberg announced that his company would spend up to $65 billion on AI-related capex. Big Tech companies are all following suit with jumbo-sized capex plans for 2025.

What is Alphabet gong to be spending that big pile of money on? According to CFO Anat Ashkenazi, “The majority of that is going to go towards our technical infrastructure, which includes servers and data centers.”

Ashkenazi said that current computing demand is exceeding supply and the company is racing to increase capacity. Pichai said that in 2024, the company broke ground on new data center campuses in South Carolina, Indiana, and Missouri. The company also announced plans for seven new subsea cables to strengthen global infrastructure.

Much like the rest of the industry, Alphabet is also investing in its own Trillium TPU AI chips, lest they become too dependent on market leader Nvidia. But they are still making sure they can sell cloud computing access to Nvidia’s popular products.

“We also continue our strong relationship with Nvidia . We recently delivered their H200-based platforms to customers. And just last week, we were the first to announce a customer running on the highly anticipated Blackwell platform.”

Pichai said that Google Cloud customers are using “eight times the compute capacity for training and inferencing than they were 18 months ago.”

Max Knoblauch3/20/26

China’s EV startup trio have all become profitable

China’s EV startup trio, Nio, Li Auto, and XPeng, are now all profitable, following the latter’s Q4 results released Friday.

XPeng reported a quarterly net profit of about $55 million, compared to rival Nio’s Q4 net profit (also its first) of about $40 million. Li Auto posted Q4 net profit of less than $1 million.

All three companies being profitable offers a stark contrast to the EV market in the US, where Rivian quietly delayed its 2027 profitability target in a filing about its Uber robotaxi partnership yesterday. Lucid is likely further away, and last month cut 12% of its US workforce as part of its “path toward profitability.”

Still, it’s not all rosy for China’s EV startups, either. XPeng ADRs were down more than 6% in Friday morning trading as its Q1 sales forecast came in below estimates. As China rolls back subsidies, auto sales are slumping. Chinese retail EV and hybrid sales fell 32% in February from the same month last year.

9.3%

Max Knoblauch3/19/26

As the war with Iran produces the biggest spike in US gas prices since Hurricane Katrina, car retailer CarMax is continuing to see heightened interest in EVs, hybrids, and plug-in hybrids.

“From Feb 1st - March 1st (inclusive), compared to March 2nd to March 15th (inclusive), we saw a 9.3% lift in page views for these vehicles,” a spokesperson for the company told Sherwood News.

As industry insiders recently told us, EV interest climbs when gas prices rise. That appears to be holding true even without EV tax credits, which the Trump administration ended under its new budget package.

CarMax also saw EV searches spike in 2022, amid Russia’s invasion of Ukraine and the resulting oil price spike.

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Incoming CEO Josh D’Amaro is replacing Bob Iger on Wednesday, though Iger will remain a senior adviser through the end of the year.

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Claire Yubin Oh

trust me.

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$35.4B

Max Knoblauch3/16/26

The tariffs imposed by the Trump administration have cost automakers at least $35.4 billion since the start of 2025, according to a new analysis by Automotive News.

That total will continue to climb this year, since the Supreme Court’s February tariff ruling largely leaves the 25% levy on vehicles and auto parts untouched.

Toyota has taken the biggest hit, projecting more than $9 billion in tariff costs in its fiscal year ending this month, while Detroit’s big three automakers — Ford, GM, and Stellantis — were hit with a combined $6.5 billion tariff charge in 2025.

In the fourth quarter, automakers sold about 8% fewer imported vehicles in the US compared to the same period a year ago, per the Automotive News Research & Data Center.

Tariff charges come at a rough time for legacy carmakers, which are also scaling back EV plans following the Trump administration’s elimination of tax credits and fuel standard goals. According to Automotive News, the cost of EV write-downs and restructuring is, so far, nearly $70 billion.

Unpacking Alphabet’s $75 billion capex plans

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