Skip to content
You can now search across every topic, entity and event.What's new
Data Centres: Boom and Backlash
25JUL

Alphabet lifts 2026 capex to $205bn

2 min read
11:23UTC

Alphabet raised its 2026 capital budget to $195-205bn at its 22 July results, the only big-four hyperscaler on the record this fortnight, as Google Cloud revenue jumped 82%.

← Back to Pipeline vetoed, campus keeps buildingJump to analysis ↓
IndustryDeveloping
Key takeaway

Alphabet raised its 2026 capital budget to $205bn even as refusals against new campuses mount.

Alphabet raised its 2026 capital-expenditure guidance to $195-205bn at its 22 July quarterly results, up from the $180-190bn it set three months earlier. Capital expenditure, or capex, is the money a company commits to physical assets such as servers, buildings and networking gear. Google Cloud revenue grew 82% to $24.8bn, and management put 60% of the extra spend into servers, 40% into data centres and networking. 1

Alphabet was the only one of the four big US hyperscalers to report inside this fortnight; Microsoft and Meta file on 29 July, Amazon on 30 July, so their figures are not yet on the record. The server-weighted split matters. Money flowing to chips rather than empty shells means the power demand arrives sooner than the construction calendar implies.

That demand already shows in the connection queues. ERCOT's Texas interconnection backlog passed 438 GW in June , roughly five times the state's peak demand and overwhelmingly data centres. Alphabet's shares fell more than 4% on the raise, the market pricing scepticism about when AI infrastructure pays back; the physical read here is simpler, that the money is buying hardware someone must find the power to run.

Deep Analysis

In plain English

Alphabet, Google's parent company, said on 22 July it now plans to spend $195 billion to $205 billion in 2026 building AI and cloud infrastructure, up from the $180-190 billion it had promised just three months earlier. Google Cloud, the part of the business that rents out computing power to other companies, grew revenue 82% compared with a year earlier, to $24.8 billion. Even so, Alphabet's shares fell more than 4% after the announcement. Investors are weighing whether all this spending will eventually pay off, or whether the company is committing more and more money without clear proof it will be worth it.

Deep Analysis
Root Causes

Alphabet's capex raise is arithmetically downstream of its own demand signal: Google Cloud's $514bn backlog, up $50bn in one quarter, represents contracted future revenue the company cannot fulfil without building capacity now, not a discretionary spending choice.

Supply-side constraints compound the pressure: roughly 60% of the new spend is earmarked for servers rather than buildings, a split reflecting component and chip lead times, not construction capacity, as the binding constraint on how fast Alphabet can convert backlog into delivered compute.

What could happen next?
  • Consequence

    Alphabet's raised guidance adds pressure on GE Vernova and other turbine suppliers already carrying multi-year gas-turbine backlogs, since more capex means more power procurement layered onto an already-booked supply chain.

  • Risk

    A 4% share-price fall on a capex raise signals investors are starting to price AI infrastructure spending as a risk factor rather than a pure growth signal, worth tracking through Microsoft, Meta and Amazon's late-July reports.

Sources:CNBC
Mentions:Alphabet →Google Cloud →Amazon →Sundar Pichai →Microsoft →ERCOT →Texas →Meta →Google →
First Reported In

Update #11 · Pipeline vetoed, campus keeps building

CNBC· 25 Jul 2026
Read original →
Different Perspectives
Indian data-centre investors
Indian data-centre investors
Amazon, CPPIB and Google committed billions to Indian data-centre capacity within a single week in June, a market absorbing hyperscale investment while New Mexico and Maryland tighten permitting this fortnight. Every US moratorium makes that alternative more attractive, not less.
Gulf sovereign capital and hyperscale infrastructure investors
Gulf sovereign capital and hyperscale infrastructure investors
GE Vernova's turbine backlog grew to 116 GW and Synergy counted a 45 GW US pipeline the same week New Mexico killed a pipeline outright. Capital keeps moving toward campuses that can secure power fastest, in the Gulf as much as Texas or Virginia.
New Mexico and Virginia regulators, and the counties opposing the build-out
New Mexico and Virginia regulators, and the counties opposing the build-out
Garcia Richard killed Energy Transfer's Green Chili lateral for a second time on 15 July, and Sierra, Santa Fe and Socorro counties layered moratoria on top; Virginia's DEQ, lacking a PFAS rule, issued Amazon's Lake Anna permit regardless. Consent belongs in statute, and New Mexico's 2027 bill is the next test of whether that principle spreads.
Global hyperscale operators
Global hyperscale operators
Operators are still filing gigawatt-scale campuses and Meta is proceeding with its $10bn Lebanon, Indiana site despite the county-level bans nearby, betting Q2 capex outruns the patchwork of restrictions. Industry framing casts New York's freeze, Oregon's surcharge and Indiana's bans as taxes and levies that push build-out toward faster-permitting jurisdictions such as India and the Gulf.
EirGrid
EirGrid
EirGrid set a 900 MW instantaneous demand-loss ceiling because a single voltage dip can trip many data centres onto backup power at once, risking imbalance above 1,150 MW. It wrote the limit into a standing procedure rather than waiting for an emergency to force one.
US host communities and ratepayers
US host communities and ratepayers
Prince William residents backed the 8-0 denial of Dulles South over the Occoquan watershed, drinking water for eight million people, while Oregon's approved tariff cuts residential bills 1.3% by charging large loads 29% more. Their position: consent and cost-attribution belong in law, not left to a developer's or a utility's discretion.