Alphabet President Ruth Porat on how Google is funding AI to win long term, and the biggest risks ahead

Alphabet is spending roughly $200 billion this year to build out its AI capacity, and the company’s president and chief investment officer reiterated Google’s plan next year for the bill to be even more substantial.

Alphabet expects capital expenditures (capex) to “increase significantly” next year, Ruth Porat said Monday at Fortune ’s Most Powerful Women Summit in Santa Barbara, Calif., adding that the company remains “capacity constrained” as demand for compute grows.

“The demand for compute—because of the value that our partners are seeing in the enterprise, in governments, what we’re seeing across our platform—suggests that we’re in the buildout here now,” she told Fortune Editor-in-Chief Alyson Shontell.

When pressed as to where exactly the industry is in the long term timeline of funding the AI building, and if we are in the peak of spending, Porat replied, “We do see this as an opportunity that extends for quite some time.” Porat, No.

11 on Fortune’s 2026 Most Powerful Women list , is shepherding one of the largest corporate spending sprees ever .

Before taking her current role in 2023, she spent nearly a decade as Alphabet’s finance chief, and before that she was Morgan Stanley’s CFO.

Porat oversees Alphabet’s investment vehicles, including its capital arms GV and CapitalG, as well as its “Other Bets” ventures, and real estate investments.

In July, Alphabet lifted its 2026 capex outlook to as much as $205 billion, and the stock dropped more than 6% the following day, a sign of how hard Wall Street is pushing for proof the massive spending will pay off for investors.

The AI spending is already reshaping Alphabet’s finances.

Capital expenditures hit $44.9 billion in the second quarter, “with the vast majority of this spent in technical infrastructure to support our investments in AI,” Alphabet CFO Anat Ashkenazi said during the company’s Q2 earnings call.

That pushed free cash flow to negative $5.9 billion, the first time Alphabet’s quarterly cash flow had dipped below zero in its more than 20 years as a public company.

Meanwhile, Google Cloud’s revenue climbed 82% to $24.8 billion, while its operating profit more than tripled to $8.8 billion.

Shontell questioned Porat about a recent report from Jefferies global head of equity strategy Chris Wood, who argued the AI boom will most likely end in massive capital destruction in the U.S. as cheaper open-source Chinese models take market share.

Porat disagreed.