Google Cloud Growth Justifies Alphabet's Record-Breaking Investment Spree

Alphabet's CEO Sundar Pichai says his company is investing in AI to capture market share and reward investors through higher growth. Google Cloud revenue has increased by 82% year over year, outpacing its top competitors Amazon and Microsoft.

The company raised its capital expenditures outlook from $185 billion to $200 billion this year, with a warning that next year's spend will be even higher. Alphabet is raising money through both debt and equity to finance capex, increasing its risk profile.

Warren Buffett has become a huge fan of Alphabet and it's now Berkshire Hathaway's third-largest position. Pichai believes the AI business 'looks like extraordinary opportunities with extraordinary returns for executing well on those opportunities.'