Part of the reason for Google’s huge capex plans: It has a $240 billion revenue backlog
Google reported strong earnings yesterday that beat analysts’ expectations. But the thing that caught investors’ attention was Google’s capex plans.
The company spent a whopping $91.4 billion for all of 2025 on capex, but it plans to roughly double that amount in 2026 to between $175 billion and $185 billion.
Why does it need to spend so much? It can’t keep up with demand due to constraints on its compute capacity. Cloud computing demand is surging, and Google simply can’t fulfill all of the orders it has, because it can’t build the data centers and AI infrastructure fast enough.
Alphabet CEO Sundar Pichai was asked on last night’s earnings call what keeps him up at night:
“At this moment, maybe the top question is definitely around compute capacity. All the constraints, be it power, land, supply chain constraints — how do you ramp up to meet this extraordinary demand for this moment, get our investments right for the long term, and do it all in a way that we are driving efficiencies and doing it in a world-class way?”
Demand is so extraordinary that Google has $240 billion in “remaining performance obligations” (RPO, or revenue backlog).
This swelling backlog is not unique to Google. Microsoft just reported $625 billion in RPO, though a big chunk of that was for one customer: OpenAI. After market close today, we will see what Amazon’s RPO backlog looks like. It was $200 billion last quarter.
