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Google has shattered corporate records by surpassing $400 billion in annual revenue for the first time. The search giant reported $402.8 billion for 2025, a 15% increase, driven by a massive surge in AI and cloud demand.
Despite – or perhaps because of this windfall – Google is doubling down on its infrastructure. The company plans to spend a record $185 billion this year on data centres and AI hardware. This represents the largest annual capital expenditure in history.
The spending surge is a direct response to the “code red” threat from ChatGPT. CEO Sundar Pichai told investors the investment is essential to meet exploding demand. Google’s Gemini app has now reached 750 million monthly users, rapidly closing the gap with OpenAI.
Profitability remains strong despite the costs. Net income hit $132 billion last year, up 30% from 2024. Google Cloud was a standout performer, with revenue jumping 48% to $17.7 billion in the final quarter.
The scale of the investment has stunned Wall Street. Google’s AI budget now exceeds the annual military spending of almost every country on Earth. Tech rivals are also ramping up, with Microsoft and Meta forecasting their own record spending.
Elon Musk briefly paused his rivalry with Google’s boss Sundar Pichai to acknowledge the milestone. “Well done,” Musk posted on X in response to the revenue news. The comment reflects the industry’s awe at Google’s financial recovery.
Analysts remain divided on the long-term impact. While some fear an “AI bubble,” others see the spending as a necessary defence. Google is betting that owning the AI infrastructure of the future is the only way to stay on top.
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