Alphabet’s chief investment officer responds to Jefferies warning that the most likely outcome of the AI boom is massive U.S. capital destruction

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The AI buildout is in full swing, and it’s incredibly expensive.

Between Amazon , Alphabet , Microsoft , and Meta , over $720 billion of capital expenditures is projected to be spent this year, most of it on AI infrastructure, according to analyst estimates compiled by Bloomberg .

Alphabet President and Chief Investment Officer Ruth Porat confirmed to me this week at the Fortune Most Powerful Women Summit that Alphabet intends to spend “significantly more” in 2027.

This year, Alphabet said it expects capital expenditures of $195 billion to $205 billion .

That’s more than double the $91.4 billion it spent in 2025.

When asked whether spending on the buildout has peaked across the industry, Porat said it is still in its early phases relative to the eventual economic value Alphabet thinks AI can drive.

“We do see this as an opportunity that extends for quite some time,” she said.

Increasingly, debt is fueling the AI buildout too.

Private credit funds such as Blue Owl, Apollo , and KKR are a growing source: Outstanding private loans to AI-related companies have climbed to more than $200 billion by some estimates.

Often, they’re lending to special purpose vehicles and smaller “neocloud” operators rather than to deep-pocketed Big Tech players.

Even Alphabet posted negative free cash flow in Q2 for the first time since its 2004 IPO to help fund AI.