Alphabet reported Q4 2025 revenue of $113.83B, up 18% year-over-year and above analyst estimates of $111.43B. Google Cloud was the standout, growing 48% to $17.66B versus expectations of $16.18B. Net income rose 30% to $34.46B.
The real story: Alphabet is preparing to spend approximately $85B on capital expenditure in 2026, nearly double what analysts expected. CEO Sundar Pichai framed this as essential for the AI race, with most spend going to data centers and compute infrastructure. The company hit $400B in annual revenue for the first time.
This mirrors patterns across hyperscalers. Microsoft just committed $17.5B to Indian data center expansion through 2029, while AWS and others compete for enterprise AI workloads. The 48% cloud growth suggests enterprises are moving beyond pilots to production deployments that require serious infrastructure.
What this means in practice: The spending surge creates opportunity and complexity for APAC enterprises. Cloud pricing in India remains under pressure as providers build capacity ahead of demand, particularly in Hyderabad, Chennai, and Pune where Microsoft is adding regions. For CTOs evaluating AWS versus Google Cloud versus Azure, the real question isn't list prices but committed spend discounts as providers fight for long-term contracts.
Worth noting: Google executives wouldn't confirm details of the Apple AI partnership during the earnings call, even when pressed by investors. The company also acknowledged supply constraints on AI chips, which explains why they're ordering two years out.
The pattern is clear: hyperscalers are betting tens of billions that enterprise AI workloads will require massive new capacity. That's good news for APAC organizations planning deployments, less good for anyone locked into three-year-old infrastructure agreements. The price war is coming, timed with India's new 20-year tax holiday for foreign cloud providers using local data centers.
History suggests the winners will be enterprises who negotiate now while providers are capacity-constrained but desperate for anchor tenants in new regions.