LAS VEGAS: Alphabet, Google’s parent company, has reiterated its commitment to investing approximately $75 billion this year to expand its data center capabilities, despite the ongoing upheaval caused by U.S. tariffs. The company is also working to reassure investors that its artificial intelligence initiatives are producing promising results.
With concerns rising regarding the substantial capital expenditures associated with AI endeavors, stakeholders are anxious as the uncertainty surrounding U.S. President Donald Trump’s tariff policies continues to shake markets and obscure economic forecasts.
When questioned about the possibility that U.S. tariffs might elevate the costs associated with constructing data centers, Sachin Gupta, the vice president and general manager for Google Cloud’s infrastructure division, acknowledged that while hardware import costs could rise, strong customer demand justifies ongoing investments.
“We’re all processing the implications of the tariffs,” he explained to Reuters.
This past Wednesday, Trump announced that he would temporarily reduce the significant tariffs recently imposed on numerous countries while intensifying his tariff campaign against China. Following this news, shares of Alphabet rose nearly 10%, contributing to a total market value increase of $1.5 trillion for the “Magnificent Seven” tech giants.
In a separate LinkedIn post this week, a Microsoft executive reiterated the company’s intention to invest over $80 billion in AI infrastructure by 2025.
Meta Platforms has also indicated plans to allocate up to $65 billion toward AI initiatives.
According to Chiraj Mehta, principal analyst at Constellation Research, AI, along with cybersecurity, remains a primary focus for businesses that are maintaining their investment strategies despite broader economic concerns.
“Positive feedback from customers who have chosen Google Cloud as their preferred AI provider reinforces the need for aggressive continued investment,” he remarked.
Clients such as TurboTax developer Intuit, Papa John’s pizza chain, and Verizon discussed at the conference how AI technologies are enhancing their operations.
Intuit’s Chief Data Officer Ashok Srivastava stated the company is “doubling down” on its plans to incorporate AI into its financial services software.
Meanwhile, Kevin Vasconi, Papa John’s Chief Digital Officer, expressed that he has not observed any decrease in the company’s AI expenditures, stating, “I see a better return on AI projects than on any other initiatives right now.”
Earlier this week, Verizon announced that an AI assistant designed for its customer service representatives, developed using Google technologies, has reduced call times and allowed reps to focus more on selling products, resulting in a notable increase in sales.
