Google’s aggressive push into artificial intelligence has pushed its free cash flow into negative territory for the first time since the company went public, as record spending on AI infrastructure continues to accelerate.
According to the Financial Times, the tech giant reported negative free cash flow of $5.9 billion in the second quarter after significantly increasing investments in data centers, AI chips, and computing infrastructure needed to support its expanding AI ecosystem.
Google also raised its 2026 capital expenditure forecast for the second time this year, increasing planned spending to $195 billion-$205 billion, up from its previous guidance of $180 billion-$190 billion.
Chief Financial Officer Anat Ashkenazi said free cash flow will likely remain under pressure as the company continues investing heavily to capture long-term growth opportunities in artificial intelligence.
Despite the unprecedented level of investment, Google’s core businesses continued to deliver strong financial results.
Quarterly revenue climbed to $120 billion, compared with $96.4 billion a year earlier. Google Cloud revenue surged 82 percent to $24.8 billion, while Search advertising revenue increased 17 percent to $63.3 billion.
Chief Executive Officer Sundar Pichai said Google’s confidence in AI has strengthened significantly over the past year, prompting the company to accelerate development of its next-generation Gemini 4 models and increase the pace of future AI releases.
Capital expenditure reached $44.9 billion during the quarter as Google races with rivals Microsoft, Amazon, and Meta to build the infrastructure needed for advanced AI models. Collectively, the four technology giants are expected to invest more than $725 billion in AI infrastructure during 2026.
Google also reported net income of $112 billion, supported by gains on investments, including its stake in SpaceX, while operating income rose 30 percent year-on-year to $40.8 billion.
The company said it will continue funding its AI expansion through operating cash flows, debt financing, and previously announced equity financing while maintaining a strong balance sheet.
