DeepSeek Sparks AI Race, Alphabet Boosts Investment to $75 Billion

The emergence of DeepSeek has intensified Western tech companies' competition in artificial intelligence (AI) development. Leading the charge is Alphabet, Google’s parent company, which is committing billions of dollars to accelerate advancements in AI.

During an earnings call following the release of its financial report, Alphabet CEO Sundar Pichai took a moment to praise DeepSeek, describing its product as remarkable.

In response to the growing AI competition, Alphabet announced a capital expenditure increase to $75 billion, equivalent to approximately Rp 1.223 trillion. This marks a significant jump from its $32.3 billion expenditure in 2023.

"One of the reasons we are so excited about AI opportunities is that we know we can unlock incredible use cases as costs continue to decline. This will lead to even more applications," Pichai said during the earnings call, as quoted by TechCrunch on Wednesday (5/2/2025).

"The opportunity is massive, which is why we are investing to seize the moment," he added.

AI Drives Google’s Revenue, Meta Joins the Race

AI has also significantly contributed to Google’s business growth. In 2024, the company’s revenue increased by 12% year-over-year to $96.5 billion. Meanwhile, Google Cloud's revenue grew by 10% to $12 billion, driven by the expansion of Google Cloud Platform (GCP), AI Infrastructure, and Generative AI Solutions.

The massive AI investment has drawn attention, particularly after DeepSeek successfully launched an AI model for just $5.5 million. DeepSeek’s success even caused Nvidia’s stock to drop, as analysts speculated that cheaper AI models could reduce demand for AI chips and data centers.

However, Alphabet is not the only company making multi-billion-dollar AI investments. Meta CEO Mark Zuckerberg recently announced that Meta will spend over $60 billion in 2025 on capital expenditures, primarily to expand its data centers.

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