Alphabet Halts Share Buybacks to Funnel Money Into Its AI Engine

When you hear that a tech giant the size of Alphabet is skipping its share‑repurchase program, you naturally wonder what’s driving the decision. The answer, as the company’s own filings and industry chatter make clear, is simple: a bleeding‑edge AI build‑out that’s gobbling up cash faster than any other line item on the balance sheet.

In the first quarter of 2026 Alphabet reported zero dollars spent on buybacks – the first time that has happened in a decade. It’s a stark contrast to the roughly $300 billion of stock the firm has already returned to shareholders over the past five years, a figure that still tops any other AI‑focused hyperscaler.

Instead of buying back stock, Alphabet pumped more than $35 billion into capital expenditures during the same quarter. That’s a 107 % jump from a year earlier and, according to the company, almost all of it is tied to AI‑related infrastructure. The spending on AI hardware and cloud capacity nearly doubled YoY, a sign that Google is racing to keep its data‑center fleet ahead of the curve.

The broader picture is equally dramatic. Alphabet’s full‑year capex outlook now sits between $175 billion and $185 billion, a range that is heavily weighted toward AI. In plain English: the company is willing to lay out a handful of zeros to power the next wave of generative models, large‑language‑model training, and the services that will sit on top of them.

One of the more headline‑grabbing moves is Alphabet’s commitment of roughly $40 billion for a stake in Anthropic – a rival AI lab that’s been making waves with its own suite of large‑language models. The deal, announced earlier this year, underscores how seriously Google’s parent is taking the "venture‑type" approach to AI: put money where the talent is, and hope the breakthroughs pay off.

All of this is happening while Google Cloud is enjoying a 63 % year‑over‑year revenue surge. The cloud backlog, as the company put it, has "nearly doubled" to more than $460 billion. That growth fuels the need for more GPU‑rich servers, faster networking, and the kind of custom silicon that Alphabet has been perfecting for years.

Investors have taken note, but not without a hint of nervousness. Over the month preceding the announcement, Alphabet’s shares slipped about 5.7 %. Yet, on a year‑to‑date basis, the stock is up roughly 83 %, a reminder that the market still believes the AI gamble could pay handsome dividends.

Prediction‑market odds, as tracked by Polymarket, now give Alphabet a 96 % chance of beating upcoming earnings expectations – a figure that feels optimistic but also reflects the confidence many have in the AI playbook.

Bottom line? Alphabet is choosing growth over short‑term shareholder returns. By pulling the plug on buybacks and channeling cash into AI, the company is betting that dominance in the next generation of intelligent services will be worth more than the immediate boost to earnings per share.