Alphabet plans higher AI investment for 2027 as profit falls 25%

Alphabet plans to sharply increase investment in artificial intelligence infrastructure in 2027, even as its profit declined in the third quarter.

Profit fell 25% to $26.1 billion, while revenue rose 25% to $127.6 billion. Cloud was a key growth driver, doubling its revenue to $30.7 billion.

Alphabet invested $51.4 billion during the quarter, including in data centers. For the full year, it expects investment to reach between $195 billion and $205 billion. Free cash flow was negative at minus $9 billion, and the stock fell more than 11% in after-hours trading.

Investors are also growing concerned about whether demand for AI services will be large enough to justify technology companies’ extensive future spending on data centers and other infrastructure.

Source: Techtidningen; reporting by Linus Bengtsson.