Alphabet Spends About 60 Cents of Every Technical Infrastructure Dollar on Servers. Nvidia's Biggest Customers Were Just Told Prices Are Going Up More Than 15%.
Alphabet's capital expenditures are projected to reach $195-205 billion in 2026, with approximately 60% (~$100 billion) allocated to servers. Bloomberg reported that AI server prices are rising over 15% for systems shipping in early 2027, driven by surging memory costs. While Alphabet has substantial cash reserves and strong operating income growth, the price increases will impact its 2027 budget, which hasn't been finalized yet. The company's free cash flow has turned negative as capital spending outpaces operating cash flow.
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