To our Shareholders,
2025 was a tremendous year for Alphabet.
We delivered our first-ever $100 billion quarter
in Q3 and saw our annual revenues exceed $400
billion for the first time. We saw strong momentum
across our entire business, including Search, Google
Cloud—which ended the year with an annual run
rate of over $70 billion—and YouTube, whose annual
revenues surpassed $60 billion across Ads and
Subscriptions. Meanwhile, consumer subscriptions
exceeded 325 million. We ended 2025 in a great
position, driven by our AI-first strategy and our
differentiated, full-stack approach.
AI Infrastructure
Our unrivaled technical infrastructure serves as the
bedrock of our AI stack. We are scaling our physical
infrastructure at a stunning pace: In 2026, we plan
to invest around $180 billion in total capex, doubled
from $90 billion last year, and 6x increase in just
four years. We offer the industry’s widest variety of
compute options to our Cloud customers, including
the latest NVIDIA GPUs and our own custom TPUs that
we have been developing for over a decade. We’re
now shipping Ironwood, our seventh-generation TPU,
which delivers a 10x performance improvement over
its predecessor, and we’ve announced TPU 8, coming
later this year. In March 2025 we announced our intent
to acquire Wiz, and the deal was finalized in March
2026. It’s our largest acquisition in our history, and an
investment by Google Cloud to improve cloud security
and enable organizations to build fast and securely
across any cloud or AI platform.
World-Class Research and Models
Our world-class research and models continue to
lead the industry. In December, we launched Gemini 3,
which drove the state of the art in reasoning and
multimodal understanding and swept AI leaderboards.
We also boast the world’s most extensive generative
media model portfolio, including our leading video
model Veo 3.1 and the viral image model sensation
Nano Banana. In our Q4 2025 earnings we shared
that our first party models like Gemini processed over
10 billion tokens per minute via direct API use by our
customers, up from 7 billion the quarter prior.
Our deep computer science roots are accelerating
discoveries, from our Gemma models being used
for cancer research to our Willow quantum chip,
which achieved a new milestone last year with the
first verifiable instance of a quantum computer
outperforming a regular supercomputer on a
computation that paves the way for future practical
applications. This momentum in quantum computing
is built on foundational science, highlighted by our
chief scientist for quantum hardware, Michel Devoret,
being awarded the Nobel Prize in Physics for his early
research—the third Googler to receive a Nobel Prize
in just the last two years.
On a personal note, I was proud to mark 10 years
as CEO of Google in 2025. My first decisions as CEO
were to pivot the company to be AI-first and to grow
sustainable businesses. Amazing to see the incredible
progress with AI and our businesses since then.
To give a sense of progress, in 2015 all of Alphabet’s
revenue added up to $75 billion. YouTube and Cloud
alone ended 2024 at an annual run rate of $110 billion.
As we look to 2026, we remain laser-focused on
pushing the next frontiers of foundation models
to make AI helpful for everyone: intelligence,
personalization, and agents.
First, model intelligence will continue to accelerate.
With Gemini 3, we are already seeing glimmers of
future capabilities today, unlocking state-of-the-art
reasoning, natively multimodal understanding,
and the ability to process massive contexts.
Second, we are rolling out Personal Intelligence
across products like AI Mode, the Gemini app, Gemini
in Chrome and more. With features like Personalized
Smart Replies in Gmail, our models can use relevant
context across your Google apps to capture your
unique tone and style—always in a way that is private,
transparent, and fully under your control.
Finally, 2026 is officially the year of the agent.
AI agents turn our consumer and enterprise products
into collaborators that can take complex actions on
your behalf. Today, nearly 75% of all new code at
Google is AI-generated and approved by engineers,
up from 50% last fall. We’re also laying the
groundwork for agentic commerce. In January we
introduced the Universal Commerce Protocol (UCP),
an open standard built with industry leaders, so
different agents and systems can work together
easily across the web. Much more to come!
We are just at the beginning of a period of hyper-
progress. We will continue to focus on our mission,
building products people love, and responsibly
advancing this technology so it benefits everyone.
Thank you for your continued support.
- Sundar