Google is spending on capital expenditures which doubled in 2018 to $25 billion, the fastest spending in four years. This spending is now outpacing its revenues according to reports. Alphabet reported on Monday that it is ramping up spending for data centers and other facilities as it just keeps increasing spending, which is substantially more than Microsoft. The increase in capital expenditures in 2018 increased at 102 percent to $25.14 billion which was up from the growth rate of 34 percent in 2017.
Spending more than rival Microsoft, which spent $16 billion on capital expenditure, which was up 39 percent year over year, Google is clearly on a mission. According to reports, data center expansion is critical for Google as it builds its cloud computing capacity. Also the firm bought Chelsea Market in New York and also bought real estate in Texas. Alphabet continues to expand its headcount as well – adding 23 percent to total 98,771. Expectations of more moderate headcount growth in 2019 was reported as well.
This type of capex or capital expenditures spending it shockingly high and it is now clear that US firms are feeling the heat from the Chinese state-run firms that are well organized and well capitalized. The race for technology dominance is under way with 5G and other technologies that are cutting edge still up for grabs for the winners.