Google is accelerating its cloud transformation with a massive push into AI infrastructure, signaling that computing is becoming as foundational as energy, transportation, healthcare, and food. This shift is driven by unprecedented capital expenditures, with Google planning to spend between $175 billion and $185 billion on capital expenses in 2026—nearly double its 2025 capex of $91.45 billion. This level of investment underscores a new era where datacenter capacity and AI compute are not just business expenses but essential infrastructure. The company’s growth is fueled by real-world usage of its generative AI models, particularly Gemini 3, which is now processing inference workloads at an extraordinary scale. In Q4 2025, Google processed over 1.3 quadrillion tokens per quarter—up 43% from Q3’s 917.3 trillion—highlighting the surge in demand for real-time AI capabilities across search, ads, YouTube, and enterprise services. This performance is powered by Google’s in-house Tensor Processing Units (TPUs), now in their seventh generation, which have been central to the company’s AI strategy since the early 2010s. Despite this massive capex, Google remains financially strong. In the final quarter of 2025, the company reported $113.83 billion in revenue, a 18% year-on-year increase, and net income of $34.46 billion, up 29.8%. Even after spending $27.85 billion on capital projects, Google ended the quarter with $95.66 billion in cash and equivalents—nearly half the amount it plans to spend in 2026. This financial resilience is rooted in the profitability of its core businesses, especially search and advertising, which continue to generate the capital needed to fund AI expansion. Google Cloud, the company’s cloud division, delivered standout results with $17.66 billion in revenue—a 47.8% increase—and operating income of $5.31 billion, up 2.54 times year-over-year. This translates to a 30.1% operating margin, the highest in Google Cloud’s history and nearly double the rate from just a year prior. The business is now more profitable than ever, driven by growing demand from enterprise customers and internal AI workloads. The gap between Google’s $240 billion revenue backlog and its capex plans is widening, indicating strong future demand. However, the company is cautious about overspending, ensuring that hardware is deployed only when it can be immediately utilized—reflecting a disciplined approach to scaling infrastructure. Google’s strategy is not just about building datacenters. It’s about integrating AI deeply into its products, driving user engagement and ad performance, which in turn funds further investment. While competitors like Microsoft and Amazon have struggled to directly monetize GenAI at scale, Google is already seeing returns from its internal AI use and cloud growth. There’s also speculation that Google’s internal AI infrastructure—used by search, ads, and YouTube—could be rebranded as part of Google Cloud, instantly making it the world’s largest cloud provider. But the company appears focused on building a distinct, independent cloud business rather than a bookkeeping gimmick. With projections of 30% to 50% top-line growth for Google Cloud in 2026, and continued software efficiency gains, Google is positioning itself not just as a cloud provider, but as a central pillar of the global AI infrastructure ecosystem. The message is clear: in the age of generative AI, compute capacity is no longer a cost—it’s the foundation of future growth.