The acceleration of Google’s massive investments in artificial intelligence is putting its cash flow under pressure and worrying the markets, despite strong growth in revenues.
For the first time in its history, the American giant Google posted negative free cash flow: – $5.9 billion in the second quarter of 2026. This figure, unprecedented for the company, comes as Google pursues a strategy of massive investments in artificial intelligence, in a context of intense competition with Microsoft, Amazon, OpenAI and Anthropic.
Record investments in AI
Google indicated Thursday that it will invest between 195 and 205 billion dollars over the year 2026, and no longer 180 to 190 billion as announced a few months ago. It will be even more in 2027, he warned.
To finance these expenses, the group resorted massively to borrowing, raising tens of billions of dollars, including an exceptional 100-year bond issue. It will also carry out a capital increase of 80 billion dollars. The challenge is to quickly increase the available computing power necessary for the operation of AI on its behalf and that of its customers, by increasing the construction and expansion of its infrastructures and data centers.
“We still face supply constraints,” acknowledged Anat Ashkenazi, Google’s financial director.
Google’s operating profit over the period was $40.8 billion. Between April and June 2026, the American giant increased its turnover by 24% compared to the same period a year ago, to $119.8 billion. This dynamic is largely driven by its cloud division, whose revenues accelerated by 82%, to $24.8 billion, driven by strong demand from companies using the cloud to integrate more AI into their processes.
Thanks to revenues generated by its search engine, its YouTube video platform and its automated advertising services, Google generated $81.6 billion in advertising revenue in the second quarter.
“Continued strong growth in search advertising supports Google’s assertion that AI complements search, not replaces it,” said Nate Elliott, analyst at Emarketer.
Google’s share price fell more than 5% at the opening of Wall Street this Thursday after the announcement of the results.
Google is also under pressure for the launch announced for June and then delayed of Gemini Pro 3.5, its most advanced AI model for businesses. Several employees told the Bloomberg agency that the model’s performance was still not up to par with the objectives set internally, particularly in code generation, the most widely used use case currently in companies.
Asked about the delay, Google CEO Sundar Pichai said the model was under testing, and assured that the company is already investing resources into Gemini 4 in order to compete with the most advanced models from Anthropic and OpenAI.
Google is engaged in a race to invest in artificial intelligence against Microsoft, Amazon, OpenAI and Anthropic. This global competition is pushing technology giants to accelerate their research and development efforts, at the cost of increased pressure on their finances and increased stock market volatility.
