Google’s AI buildout has become large enough to overwhelm even a very strong revenue quarter. Ars Technica reports that Alphabet brought in $119.8 billion in second-quarter revenue, but sharply higher infrastructure spending pushed the company into negative free cash flow for the first time.
Search remained the biggest business at $63.3 billion, while Google Cloud reached $24.8 billion, up 23.8 percent from the previous quarter. Those numbers show demand for Google’s AI and cloud services is still strong. The pressure comes from the cost of supplying that demand.
Google previously guided investors toward $180 billion to $190 billion in 2026 capital expenditures. It now says infrastructure spending could reach $205 billion this year, far above the $91 billion spent in 2025. Much of that money is tied to data centers and computing capacity for AI models.
The quarter captures the central tension of the AI race. The largest platforms can grow revenue while still facing investor questions about how long massive data-center spending will take to pay back.