Alphabet praises DeepSeek, but it's massively ramping up its AI spending

Core Insights - The AI budget growth is under scrutiny due to concerns about competition from cheaper AI models, particularly from DeepSeek, which impacted Nvidia's stock [1] - Alphabet plans to significantly increase its capital expenditures to $75 billion this year, marking a 42% increase to enhance its AI initiatives [2] - The company believes that lower AI costs will drive demand for its services, leveraging its large user base to benefit from increased usage [3] - Alphabet's CEO emphasized the potential for extraordinary use cases in AI as costs decrease, indicating a strong commitment to investing in this area [4] - Despite uncertainties, major tech companies are currently able to sustain their AI investments, with no clear indication of when spending might slow down [5]