Google to double AI spending to $185bn

Good morning and welcome back. In today’s newsletter:

Google set to double AI spending to $185bn after strong earnings
Patrick Drahi shifts assets worth billions away from creditors
Software sell-off threatens to delay London’s €19bn Visma float
The controversial plan to set ‘Buy European’ rules

We start with Google, which is deepening its investments in AI, encouraged by strong earnings and financial firepower.

What to know: Google said it planned to double its capital expenditure this year to as much as $185bn as it stepped up its huge bet on AI.

The search giant increased its forecast for capex in 2026 to a range of $175bn to $185bn, far exceeding analysts’ expectations of about $120bn, Google’s parent company Alphabet said yesterday.

“Our capex spend this year is an eye towards the future,” said chief executive Sundar Pichai.

Financial muscle: Google’s huge AI investment plans were supported by big jumps in earnings and cash flow, as its advertising revenue continued to climb and AI demand lifted its cloud-computing arm.

Net income increased 30 per cent to $34.5bn in the fourth quarter from the previous year, beating analysts’ expectations. Alphabet made $132bn of profit in 2025. Read the full story.

AI and productivity: Signs of the technology’s effects are already starting to peek through in recent industry data, writes Soumaya Keynes.

Here’s what else we’re keeping tabs on today:

Economic data: Manufacturing PMI data is due for the Eurozone, France, Germany, Italy and the UK.
Monetary policy: The European Central Bank and the Bank of England announce interest rates.
Glencore-Rio Tinto: A megamerger to create the world’s biggest miner hangs in the balance ahead of today’s “put up or shut up” deadline.
Middle East: German Chancellor Friedrich Merz continues with his tour of the Gulf.
Rugby: The Six Nations tournament begins with France playing Ireland in Paris.
Results: Amazon, BNP Paribas, Maersk, News Corp, Shell and Thomson Reuters report earnings. See The Week Ahead for a fuller list.

Five more top stories

1. Exclusive: Billionaire Patrick Drahi has hollowed out a key entity of his indebted telecoms empire as part of a series of aggressive moves to shift assets worth billions of euros out of the reach of lenders. Read details from recent filings.

2. Exclusive: Visma, the €19bn private equity-backed software group, may delay its plans for London’s biggest initial public offering in years, following a sell-off of software stocks over fears of the impact of AI.

3. Britain stands to benefit from a €90bn EU loan for Ukraine after member states agreed to include UK companies among those that could win military procurement contracts to supply Kyiv, overcoming French opposition.

4. Hungary’s Prime Minister Viktor Orbán has ordered the country’s courts to scrap lawsuits challenging his government over a contentious charge on cities, seeking to override the judiciary in what critics said was a fresh attack on the rule of law.

5. Exclusive: London-based hedge fund Rokos Capital Management has ended talks with Lord Peter Mandelson over a lucrative advisory role after further revelations about his relationship with the convicted sex offender Jeffrey Epstein. Read the full story.

The Big Read

French worker, wind turbine, VW electric car — © FT montage/Getty Images/Bloomberg

Are proposals to encourage manufacturing to stay in the EU pragmatic or protectionist? The make-up of the “Buy European” rules has been the subject of fierce internal battles, delaying the legislation.

Can Europe stand on its own two feet? Join FT journalists for a subscriber-only webinar on February 12 on the evolving transatlantic relationship. Register here and send us your questions.

We’re also reading . . .

Chinese economy: Most provinces are targeting lower economic growth this year, in what many economists believe is a signal Beijing will set a lower range for its official goal in 2026.
Channelling Alan Greenspan: Fed nominee Kevin Warsh believes he can afford to take a chance on productivity gains informing rate policy in the same way the former chair did in the 1990s.
Lloyd’s of London: The UK group’s chief executive has said that insurers must be “risk-on” in offering cover for fast-growing industries such as military technology and AI.
Monopoly money: A Kremlin-linked business has become a leading player in Russia’s efforts to keep money flowing across its borders to circumvent sanctions, with the help of imitation banknotes.

Chart of the day

Recent losses at the Universities Superannuation Scheme, the UK’s biggest private pension fund, have put its push into private markets under the spotlight.

USS was set up in 1974 to provide pensions for academic and senior administrative staff in the university sector.

Take a break from the news . . .

A road trip through South Africa’s Eastern Cape takes Sophy Roberts far from the tourist trail and to a former leper colony that has been reborn as a dreamy retreat.