Google starts training Gemini 4 as Alphabet raises capex forecast to $205 billion

Alphabet raised its 2026 capital expenditure forecast to $205 billion and began training Gemini 4, a new foundation model. CEO Sundar Pichai said Google's next leap in artificial intelligence depends on building "far larger foundation models."

How much will Alphabet invest in 2026

Alphabet raised the upper end of its 2026 capex forecast to $205 billion, explaining that demand for cloud and AI capacity keeps outrunning the company's spending. Most of the money goes to data centers, accelerators and the infrastructure needed to train large models.

The cloud division remains the fastest-growing part of the business: according to Alphabet's financial reporting, Google Cloud revenue rose 82% year over year in the second quarter of 2026. The company names demand for cloud and AI compute as the main reason it had to increase its earlier investment plan.

• 2026 capex forecast: up to $205 billion
• Google Cloud growth in Q2 2026: 82% year over year
• Reason for higher investment: demand is outrunning the company's spending
• Training of the new Gemini 4 model has started
• Investment priority: data centers and compute for model training

Why Google needs a larger foundation model

Google needs a substantially more powerful foundation model to make its next leap in AI, which is how Sundar Pichai describes the company's strategy. In his logic, the capabilities of Gemini's end-user products (the assistant, search, developer tools) are limited by the size and quality of the foundation model they run on.

The company has already moved from statements to action: a large-scale training run of Gemini 4, the successor to the current Gemini generation, has started. Training models of this size takes enormous compute, and that is exactly how Alphabet explains its record 2026 capex forecast.

"The next leap depends on building far larger foundation models," said

Sundar Pichai, CEO of Alphabet and Google.

What is behind the bet on scale

The bet on scale means Google ties Gemini's progress less to incremental improvements than to growth in the foundation model itself and the infrastructure behind it. The $205 billion forecast for 2026 follows directly from that approach: the larger the model, the more chips, electricity and data centers it needs. Alphabet openly acknowledges that demand is outrunning its investment, which means the forecast may not turn out to be a ceiling for 2026.

For the market, this is a signal: the AI labs' race is increasingly constrained by capital. Only a handful of companies can afford training runs that cost billions of dollars and capex in the hundreds of billions, and Alphabet clearly intends to stay among them.

What this means

Google is betting on size: the company ties Gemini's future to a larger foundation model and to infrastructure spending in the hundreds of billions of dollars, not just cosmetic updates. If the bet pays off, Gemini 4 will be Google's main argument in its competition with OpenAI and Anthropic, and the bill for this race is already measured in $205 billion of annual investment.

Frequently asked questions

What is Gemini 4?

Gemini 4 is Google's next foundation model and the successor to the current Gemini generation. According to Sundar Pichai, the company has already started its training run; Google has not given an exact release date.

How much will Alphabet spend on AI in 2026?

Alphabet raised its 2026 capital expenditure forecast to $205 billion. The company explains the revision by saying that demand for cloud and AI infrastructure is outrunning its current spending, and Google Cloud grew 82% in the second quarter of 2026.