00:00Alphabet, the parent of Google, Tesla. Two very different companies, but the story between them, capital expenditures and AI.
00:07Alphabet raised its CapEx guidance for 2026. At the top end, spending will be $205 billion.
00:14But there's also evidence that the AI demand for Google is real. Cloud revenue surged 82%.
00:19If there was an area of disappointment slightly, it was in search, where there was a modest miss against street
00:25expectations.
00:25But no evidence that search is being disrupted too much from consumers using chatbots instead of going to Google.
00:33Elsewhere, it was an assessment of growth versus cost and investors weighing booming cloud demand against ever higher infrastructure spending.
00:43The next test, whether AI revenue growth goes fast enough to catch up with that CapEx demand.
00:48Tesla CapEx, it's going to stay at $25 billion for 2026, but the company is saying it will go up
00:55over the next two to three years.
00:57They're not even on track halfway through the year to meet the $25 billion CapEx guide.
01:01But Musk talked about the idea that they would rather move more quickly than target capital efficiency.
01:08The difference with Tesla is like not the same evidence that in the world of AI, the future business lines,
01:14RoboTaxi, humanoid robotics, they don't have much to show for it yet.
01:17And so the appeal really was for patience that these are still long shots with a big build out ahead.
01:23This is Ed Ludlow for Bloomberg News in San Francisco.
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