Google says it must double AI compute every 6 months to meet demand

Google’s The AI ​​infrastructure boss told employees that the company must double its computing capacity every six months to meet demand for AI services.

At an all-hands meeting on November 6, Google Cloud vice president Amin Vahdat gave a presentation titled “AI Infrastructure” and included a slide on “AI computing demand,” viewed by CNBC. The slide said: “Now we need to double every 6 months… 1000 times over the next 4-5 years.”

At the meeting where Alphabet CEO Sundar Pichai and CFO Anat Ashkenazi also took questions from employees, Vahdat said, “Competition in artificial intelligence infrastructure is the most critical and also the most expensive part of the artificial intelligence race.” he said.

The presentation comes a week after Alphabet reported better-than-expected third-quarter results and raised its capital spending forecast for the second time this year to a range of $91 billion to $93 billion, followed by a “significant increase” in 2026. Microsoft, Amazon And Meta They also strengthened their capex targets, and the four companies now collectively expect to spend more than $380 billion this year.

Vahdat said Google’s “mission is of course to build that infrastructure, but that’s not necessarily to outperform the competition.” “We’re going to spend a lot of money,” he said, adding that the main goal is to provide infrastructure that is “much more reliable, more performant and more scalable than what’s available anywhere else.”

In addition to infrastructure improvements, Vahdat said Google is strengthening its capacity with more efficient models and custom silicon. Last week, Google announced the public launch of its seventh-generation Tensor Processing Unit called Ironwood, which the company says is almost 30 times more power efficient than its first Cloud TPU from 2018.

Vahdat said the company has a big advantage with DeepMind, which has research on what artificial intelligence models might look like in the coming years.

Vahdat said Google should be able to “deliver 1,000 times more capacity, compute and storage networks at essentially the same cost and increasingly with the same power and the same level of energy.” “It won’t be easy, but through collaboration and co-design we will achieve this goal.”

Pichai told employees at the meeting that 2026 will be “busy,” citing AI competition and pressure to meet cloud and computing demand.

He also answered a question about a potential AI bubble, a topic that has resonated lately in Silicon Valley and Wall Street as investors doubt whether the trillions of dollars in spending expected in the coming years is justified.

The question the employee read out loud was: “With significant Buy investments and rumors of the possibility of a Buy bubble bursting in the market, how do we intend to ensure long-term sustainability and profitability if the Buy market does not mature as expected?”

Pichai acknowledged the concerns.

“That’s a great question. It’s definitely a zeitgeist question, people are talking about it,” Pichai said.

He then reiterated a point he’s made in the past about the risks of not investing aggressively enough and highlighted Google’s cloud business, which grew 34% year over year in revenue to more than $15 billion in the quarter. Its accumulated amount reached 155 billion dollars.

“I think it’s always difficult in these moments because the risk of underinvestment is quite high,” Pichai said. “I actually think about how phenomenal the cloud numbers are, those numbers would be so much better if we had more computing.”

He said the company is taking a disciplined approach, pointing to the strength of the underlying business and the company’s balance sheet.

“We are in a better position against misses than other companies,” Pichai said.

Looking ahead to next year, Pichai told employees “there will no doubt be ups and downs.”

“This is a very competitive moment, so you can’t rest on your laurels,” he said. “We have a lot of hard work ahead of us, but I still think we’re in a good position right now.”

Google declined to comment.

The bubble talk has picked up steam ahead of Nvidia’s quarterly earnings report on Wednesday. Shares of big AI winners CoreWeave And Seer They were beaten, continuing a month-long decline. One Interview with BBC Earlier this week, Pichai said there are “elements of irrationality” in the market and that if a bubble bursts, “no company, including us, will be immune.”

Nvidia CEO Jensen Huang began his commentary on the chipmaker’s earnings call on Wednesday by dismissing the AI ​​bubble hypothesis, saying: “We’re seeing something very different.” Nvidia, which counts Google as a major customer, reported a 62% revenue increase, beating forecasts, and issued stronger-than-expected guidance for the fourth quarter.

Still, markets fell on Thursday; Nvidia shares fell 3.2%, while Nasdaq fell 2.2%. Alphabet’s shares fell 1.2%.

Earlier this week, Google launched its latest AI model, Gemini 3, which it says will provide better answers to more complex questions compared to previous models. Google is in a race with artificial intelligence companies, especially OpenAI, to bring advanced artificial intelligence tools to as many people as possible.

However, Pichai said capacity supply is a bottleneck. He gave the example of Veo, the company’s video creation tool that was updated last month.

“How exciting it was when Veo launched,” Pichai said. “If we could give this to more people on the Gemini app, I think we would have more users, but we couldn’t do that because we’re on a compute constraint.”

Another highly rated employee question read at the meeting said, “Capital expenditures are accelerating at a much faster rate than our operating income growth,” and asked what the company’s “healthy free cash flow” strategy is for the next 18 to 24 months.

Ashkenazi, who joined Google as finance chief last year, said the company has a number of potential opportunities, including the potential to bring more customers from physical data centers to the cloud.

Overall, he said, “The opportunity before us is significant and we cannot miss this momentum.”

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