NEW YORK, Feb 4 (Reuters Breakingviews) - If the artificial intelligence trade is a casino, why not take as many chances as possible to win? That’s the apparent philosophy at Google owner Alphabet (GOOGL.O), opens new tab. Once menaced, opens new tab by fears that chatbots would replace its ubiquitous search engine, the internet titan’s valuation now challenges machine-learning hardware kingpin Nvidia (NVDA.O), opens new tab. Boss Sundar Pichai boasts everything from chips to models to servers and more. As disintermediation worries jump from victim to victim, that will give investors more opportunities to find comfort in a colossal new spending pledge. It’s a tenuous way to brutalize rivals.

Strong results, opens new tab for the final three months of 2025, unveiled on Wednesday, are a necessary boon but hardly the main story. Instead, the big question for Big Tech is whether financial pressure will cause anyone to blink on once-unthinkable capital expenditures on servers and chatbot infrastructure. Pichai’s promise to dole out between $175 billion and $185 billion in 2026, roughly double what it spent last year, is a huge new escalation, exceeding even Meta Platforms’ (META.O), opens new tab free-spending forecasts by 50%.

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It’s a delicate moment for something so big. OpenAI, which started off the machine-learning mania when it released ChatGPT, internally declared a “code red” as it scrambles to fend off a late-awakening but resurgent Google, the Wall Street Journal reported, opens new tab. Stocks of Microsoft (MSFT.O), opens new tab and Oracle (ORCL.N), opens new tab, key partners and backers of CEO Sam Altman, have wobbled over worries about their immense exposure to his company. Wall Street, even if only vaguely and far-off, foresees the possibility of capitulation: analysts now expect the two companies to finally cut capital expenditures in 2030, even as Google and Meta keep ramping up, according to Visible Alpha. If fears rise further, the predicted timing of that moment may become a benchmark for the state of the AI race.

Alphabet, by contrast, has seen its valuation as a multiple of EBITDA rise from trailing these peers to now outshining them, nearly converging with chipmaker Nvidia, once the unquestioned beneficiary no matter what happens in AI. Its in-house chips, known as TPUs, promise a cost-competitive alternative for key tasks. Gemini, its silicon-powered assistant, has taken market share from OpenAI. Anthropic, the fast-growing independent developer of coding darling Claude, uses Google’s chips, Google’s servers, and counts Google as a backer. Versions of Gemini and Claude are five of the top ten models used on OpenRouter, opens new tab.

All of this may yet evaporate amid fierce competition, and Alphabet’s ubiquity offers vulnerabilities to whatever the next panic strikes, as well as opportunities. With others wavering, though, even uncertain promises to dominate by financial force will make their mark.

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Context News

• Google owner Alphabet said on February 4 that it generated $114 billion in revenue in the final three months of 2025, an 18% increase from the same period a year prior. Operating income rose 32% to $36 billion, narrowly below analysts’ expectations, according to Visible Alpha.
• In a press release, Alphabet said that it expects between $175 billion and $185 billion in capital expenditures in 2026. Analysts anticipated roughly $121 billion in such spending this year.

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Editing by Rob Cyran; Production by Pranav Kiran

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Jonathan Guilford

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Jonathan Guilford is Breakingviews U.S. Editor, based in New York. He has covered financial news across Europe and the United States for 10 years. He joined Reuters Breakingviews in 2021 from Dealreporter, where he led risk arb coverage strategy from New York while covering the technology, media and telecommunications space. He previously covered the European healthcare services market. He studied English and Italian at Royal Holloway, University of London.

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