Amin Vahdat, VP of Machine Studying, Programs and Cloud AI at Google, holds up TPU Model 4 at Google headquarters in Mountain View, California, on July 23, 2024.
Marc Ganley
Google ‘s AI infrastructure boss advised staff that the corporate has to double its compute capability each six months so as to meet demand for synthetic intelligence companies.
At an all-hands assembly on Nov. 6, Amin Vahdat, a vp at Google Cloud, gave a presentation, considered by CNBC, titled “AI Infrastructure,” which included a slide on “AI compute demand.” The slide mentioned, “Now we should double each 6 months…. the subsequent 1000x in 4-5 years.”
“The competitors in AI infrastructure is probably the most important and in addition the costliest a part of the AI race,” Vahdat mentioned on the assembly, the place Alphabet CEO Sundar Pichai and CFO Anat Ashkenazi additionally took questions from staff.
The presentation was delivered every week after Alphabet reported better-than-expected third-quarter outcomes and raised its capital expenditures forecast for the second time this 12 months, to a spread of $91 billion to $93 billion, adopted by a “important enhance” in 2026. Hyperscaler friends Microsoft, Amazon and Meta additionally boosted their capex steerage, and the 4 firms now anticipate to collectively spend greater than $380 billion this 12 months.
Google’s “job is in fact to construct this infrastructure but it surely’s to not outspend the competitors, essentially,” Vahdat mentioned. “We’re going to spend so much,” he mentioned, including that the true purpose is to offer infrastructure that’s far “extra dependable, extra performant and extra scalable than what’s accessible wherever else.”
Along with infrastructure buildouts, Vahdat mentioned Google bolsters capability with extra environment friendly fashions and thru its customized silicon. Final week, Google introduced the general public launch of its seventh technology Tensor Processing Unit known as Ironwood, which the corporate says is sort of 30 instances extra energy environment friendly than its first Cloud TPU from 2018.
Vahdat mentioned the corporate has an enormous benefit with DeepMind, which has analysis on what AI fashions can appear to be in future years.
Google must “be capable of ship 1,000 instances extra functionality, compute, storage networking for primarily the identical value and more and more, the identical energy, the identical power stage,” Vahdat mentioned. “It will not be straightforward however by way of collaboration and co-design, we’ll get there.”
Sundar Pichai, chief govt officer of Alphabet Inc., in the course of the Bloomberg Tech convention in San Francisco, California, US, on Wednesday, June 4, 2025.
David Paul Morris | Bloomberg | Getty Photos
Pichai advised staff on the assembly that 2026 might be “intense,” citing AI competitors and the strain to fulfill cloud and compute demand.
He additionally answered a query a couple of potential AI bubble, a subject that is gained resonance throughout Silicon Valley and Wall Road of late as traders have grown skeptical about whether or not the trillions of {dollars} in anticipated spend within the coming years is justified.
The worker query that he learn aloud requested, “Amid important Al investments and market speak of a possible Al bubble burst, how are we desirous about guaranteeing long-term sustainability and profitability if the Al market does not mature as anticipated?”
Pichai acknowledged the considerations.
“It is an excellent query. It has been undoubtedly within the zeitgeist, persons are speaking about it,” Pichai mentioned.
He then reiterated a degree he is made up to now concerning the dangers of not investing aggressively sufficient, and highlighted Google’s cloud enterprise, which simply recorded 34% annual income progress to greater than $15 billion within the quarter. Its backlog reached $155 billion.
“I feel it is at all times troublesome throughout these moments as a result of the danger of underinvesting is fairly excessive,” Pichai mentioned. “I really suppose for the way extraordinary the cloud numbers have been, these numbers would have been a lot better if we had extra compute.”
He mentioned the corporate follows a disciplined strategy, pointing to the power of the underlying companies and firm’s stability sheet.
“We’re higher positioned to resist, , misses, than different firms,” Pichai mentioned.
Market jitters
Looking forward to subsequent 12 months, Pichai advised staff, “there might be little doubt ups and downs.”
“It is a very aggressive second so, you may’t relaxation in your laurels,” he mentioned. “We now have a whole lot of laborious work forward however once more, I feel we’re effectively positioned by way of this second.”
Google declined to remark.
The bubble dialog picked up steam forward of Nvidia’s quarterly earnings report on Wednesday. Shares of huge AI winners like CoreWeave and Oracle have gotten hammered, persevering with a month-long slide. In an interview with BBC earlier this week, Pichai mentioned there are “parts of irrationality” available in the market and that if a bubble have been to burst, “no firm goes to be immune, together with us.”
Nvidia CEO Jensen Huang started his commentary on the chipmaker’s earnings name on Wednesday by rejecting the premise of an AI bubble, saying that, “We see one thing very totally different.” Nvidia, which counts Google as a significant buyer, reported 62% income progress, topping estimates, and issued stronger-than-expected steerage for the fourth quarter.
Nonetheless, the markets sank on Thursday, with Nvidia shares sliding 3.2%, pushing the Nasdaq down 2.2%. Alphabet’s inventory fell 1.2%.
Earlier this week, Google launched its latest AI mannequin, Gemini 3, which the corporate says will present higher solutions to extra advanced questions in contrast with prior fashions. Google is in a race with AI firms, most notably OpenAI, to get its superior AI instruments within the palms of as many individuals as doable.
Nonetheless, Pichai mentioned capability provide is the bottleneck. He gave the instance of video technology software Veo, which the corporate upgraded final month.
“When Veo launched, how thrilling it was,” Pichai mentioned. “If we might’ve given it to extra folks within the Gemini app, I feel we might have gotten extra customers however we simply could not as a result of we’re at a compute constraint.”
One other highly-rated worker query learn on the assembly mentioned, “Capex is accelerating at a charge considerably quicker than our working revenue progress,” and requested what the corporate’s technique is for “wholesome free money move” over the subsequent 18 to 24 months.
Ashkenazi, who joined Google as finance chief final 12 months, mentioned the corporate has plenty of prospects, together with the potential to deliver extra prospects from bodily information facilities into the cloud.
Broadly, she mentioned, “The chance in entrance of us is important and we will not miss that momentum.”
WATCH: Google releases Gemini 3
