Google burned through cash in the second quarter for the first time since going public more than two decades ago as gargantuan artificial intelligence (AI) infrastructure spending has transformed it from an asset-light business into a capital-intensive one.
The company said free cash flow for the three months to the end of June turned to minus $5.9 billion (€5.2 billion), much lower than analysts had expected, as it again upped its spending forecast for data centres and other AI hardware.
Chief financial officer Anat Ashkenazi said capital expenditures in 2026 would be $195 billion-$205 billion, up from previous guidance of $180 billion-$190 billion. The stock dipped about 3.5 per cent in after-hours trading.
“We expect that free cash flow will remain under pressure driven by our investments in technical infrastructure, which enable us to capitalise on the AI opportunity and continue to drive attractive returns,” Ashkenazi said.
Google’s second increase to its capex budget this year comes as it races rivals Meta, Microsoft and Amazon to build AI infrastructure, with the four hyperscalers combined on track to spend more than $725 billion in 2026.
