Google’s Parent Just Crossed $400bn in Annual Revenue: The AI Spending Era Is Here

Alphabet, the parent company of Google, has seen its full-year revenue go above $400 billion for the first time. 

In its latest public filing, Alphabet reported full-year revenue of about $402.8 billion for the year ended December 31 2025. That is up from about $350.0 billion in the previous year.

Alphabet continues to generate significant revenue from its core businesses while expanding into AI.

The real story is spending

Alphabet has signalled heavier capital spending for 2026. Reuters reported that the company expects a sharp rise in capital spending as it builds more AI capacity.

Capital spending here means expensive physical build-up. It includes data centres, chips servers, power cooling and networks. AI needs a lot of computing power. When Alphabet commits to this level of spending, it signals it believes AI demand will remain strong for years.

Reuters also reported comments from Alphabet CEO Sundar Pichai that the company is still supply-constrained in AI infrastructure terms. 

AI tools will continue to improve and become easier to use as large companies build the underlying infrastructure now. Over time, this can make AI more affordable and accessible for startups, SMEs, and large companies.

What business leaders should take from it

AI tools will keep getting better and more available, not by magic, but because the biggest firms are building an AI infrastructure base now at extreme scale. 

That tends to bring costs down over time and makes new products possible, but it also means the winners will be the firms that can adopt fast, train teams, and plug into reliable platforms without waiting for perfect conditions.