Alphabet’s $635B AI Spending Faces Energy Costs; Search Changes Impact Future PLC
Alphabet and other tech giants plan $635B AI capex in 2026, up from $383B, but Middle East energy spikes threaten projects and could prompt equity market corrections. Google search traffic changes slashed Future PLC’s full-year margin outlook by nearly 30%, underscoring risks to its advertising and shopping network.
1. AI Spending Forecast
Alphabet and other major tech firms have slated $635 billion for AI infrastructure in 2026, representing a 66% increase from the prior year’s $383 billion and nearly eightfold growth since 2019.
2. Energy Cost Risks
Escalating oil prices tied to Middle East tensions could drive up data centre electricity expenses, potentially forcing capex cuts in early 2026 and triggering corrections in equity markets if higher energy costs are not reflected in earnings.
3. Search Traffic Changes Impact
Recent adjustments to Google’s search algorithms reduced referral traffic to publisher Future PLC, leading to a nearly 30% downward revision of its full-year margin outlook and highlighting potential headwinds for Google’s advertising and shopping revenue streams.