Google CEO Pichai: Gemini 4 Undergoing 'Most Ambitious Pre-Training Run Yet' as Alphabet Raises 2026 Investment to Up to $205 Billion

Alphabet has revised its 2026 capital expenditure forecast upward to a range of $195 billion to $205 billion, increasing from the prior guidance of $180 billion to $190 billion. The company attributed the adjustment to demand that continues to outpace its current investment levels. The revised figure places Alphabet among the largest single-year infrastructure spenders in the technology industry, reflecting a broader trend in which Microsoft, Amazon, and Meta have also significantly expanded their own AI-related capital commitments for data centers, custom silicon, and energy resources.

The announcement accompanied Google's second-quarter 2026 earnings, which showed total revenue of $119.8 billion — a 24 percent year-over-year increase that surpassed analyst consensus estimates of $116.9 billion. Google Cloud reported revenue of $24.8 billion, representing 82 percent growth, while the Services segment reached $94.5 billion, up 15 percent. Cloud's accelerating growth underscores its increasing strategic weight within Alphabet, as enterprise demand for AI compute and cloud infrastructure continues to expand.

The Gemini app has reached 950 million monthly active users, a significant increase from 750 million reported in February. AI Mode in Google Search has surpassed one billion monthly active users following its global rollout in October.

Google asserts that AI Mode, similar to AI Overviews before it, is generating more overall search queries. However, the company notes this should not be conflated with increased website traffic relative to traditional search. Google states it sends billions of clicks to websites weekly through AI-powered Search features, though it has not provided specific comparative data against traditional search volumes. The evolution of Google's search experience has drawn attention from publishers and regulators, as AI-generated summaries reshape how users interact with search results and how content creators derive traffic.

On the advertising front, AI Max has exited beta testing and is already being used by 500,000 advertisers. Alphabet maintains that AI is unlocking billions of new search queries that were previously difficult to monetize.

The cost per AI response in AI Mode has fallen to its lowest point since the feature launched, even as Google deploys more powerful underlying models. This trend mirrors efficiency gains demonstrated by the recent Gemini Flash 3.6 release.

"We're seeing tons of demand for our workhorse Gemini Flash series because it hits the sweet spot of performance and cost," said Google CEO Sundar Pichai.

Google Targets Frontier Leadership with Gemini 4

Google continues to develop new frontier models and intends to release updates on a monthly cadence. However, Gemini 3.5 Pro does not appear to be part of that schedule, despite Google confirming it is currently in testing.

During the earnings call, Pichai acknowledged that Google requires a more capable base model to close the gap with frontier competitors. The next generation of frontier AI models will demand "much larger base models," he stated.

"We have started our most ambitious pre-training run yet for Gemini 4, and are excited by the progress we are seeing at the frontier," Pichai said.

He also identified specific areas where Google is working to improve. "There are areas where we have acknowledged we need to improve. Coding and agentic coding is an example of that, and I think the teams are very, very focused on it."