Apple just made a decision that tells you everything about where AI is headed. Rather than building its own large language models from scratch, the company chose Google’s Gemini to power the next generation of Siri.
The deal sent Alphabet’s market cap to $4 trillion in January 2026, briefly making it the world’s second-most valuable company. That celebration didn’t last long.
The spending problem
Alphabet followed up the partnership news by projecting capital expenditures between $175 billion and $185 billion for 2026. That’s nearly double its roughly $91 billion in 2025 spending, all directed at AI compute capacity and cloud infrastructure.
Investors were, to put it mildly, not thrilled. Alphabet’s shares dropped 5% after the spending announcement.
