Alphabet's Rapidly Growing $50 Billion Business Is a Huge Advantage in the AI Arms Race
Comments from Google Cloud's CEO suggest free cash flow could come back in a major way.
Overview
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) has come under pressure lately as management pushes forward with its massive AI spending plans. Not only does it expect to spend around $200 billion in capital expenditures this year and significantly more next year, it also has $811 billion in purchase commitments and contractual obligations on the books, most of which it will pay by 2030. Some investors are worried that Alphabet may be spending too much on AI, especially as its free cash flow dips into negative territory, and it taps debt and equity markets for new capital.
Google Cloud CEO Thomas Kurian revealed a few details about the cloud computing business that should give investors confidence in its future, including the fact that it's sitting on a rapidly growing $50 billion business that gives it a huge advantage over the competition.
Image source: The Motley Fool.
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Originally published at www.fool.com.