Google $GOOGL ( ▼ 0.54% ) did more than just beat earnings this week. It also showed Wall Street why its capital spending is about to go into overdrive.
After shelling out $91.4 billion in 2025 capex, the company now plans to spend between $175 billion and $185 billion in 2026. That eye-popping jump raised eyebrows, but there is a simple explanation: Google has more demand than it can physically handle.
Drowning in demand
Google’s cloud and AI services are selling faster than it can build the infrastructure to support them. CEO Sundar Pichai said the company is running into hard limits around power, land, and supply chain capacity as it races to add more compute.
Right now, Google is sitting on $240 billion in remaining performance obligations, essentially a revenue backlog of contracted business it has not delivered yet. In plain English, customers are lined up with cash in hand, and Google needs more data centers to serve them.
Capex with a purpose
This is not speculative spending. The company is not building empty data halls and hoping someone shows up. It already has the orders. The risk is execution: can Google build fast enough, secure enough power, and get enough chips to turn that backlog into recognized revenue?
That dynamic is playing out across Big Tech. Microsoft $MSFT ( ▼ 4.95% ) recently reported a staggering $625 billion backlog, though a large share is tied to OpenAI. Amazon $AMZN ( ▼ 4.42% ), which reports next, had about $200 billion in backlog last quarter.
The AI boom has flipped the script. Instead of asking whether hyperscalers are overspending, investors are now asking whether they can spend fast enough to keep up.