Despite record revenues of $119.8 billion in Q2 2026, Google has reported negative free cash flow for the first time since going public, spending $44.9 billion on AI infrastructure against $39.1 billion in operating cash flow. The company has significantly increased its capital expenditure forecast to as much as $205 billion for 2026, reflecting the massive cost of building AI data centers, which caused its stock to drop around 4.5%. Google's long-term AI position also faces uncertainty, with a delayed flagship Gemini model, reports of falling behind competitors, and a wave of departures among top AI researchers.
