Google burning through cash with spiralling AI costs

Google parent Alphabet saw its business continue to grow in recent months, yet growing spending on Artificial Intelligence (AI) infrastructure put its leftover cash into negative territory.The company's free cash flow, the cash it maintained after paying for operations and investments, came in at negative $5.9bn (£4.3bn) for the first time in at least a decade, according to its past financial records.Alphabet's spending on AI is now expected to hit as much as $205bn this year, an increase from $190bn, as major tech companies race to build around a new wave of the technology. Meanwhile, Alphabet's combined quarterly revenue hit $119.8bn, up 23% compared with the same time last year.But the company's stock fell 4% in after hours trading.Anat Ashkanazi, Google's chief financial officer, noted on a call with financial analysts that the company had shown negative free cash flow due to growing capital expenditures, essentially all of which was related to AI spending.She said the company spent $45bn in the second quarter, with 60% of the cost going towards servers and the remaining 40% going towards data centres. Alphabet's capital spending was $36bn in the first quarter of this year.