Core Insights - Alphabet is significantly increasing its investment in artificial intelligence, planning to spend $85 billion on capital expenditures in 2023, with two-thirds allocated for servers to support large language models [1][2] - CapitalG, Alphabet's independent growth fund, has $7 billion in assets and has been an early investor in several major companies, with 36 publicly traded stocks as of Q2 2023 [2][3] - The fund divested from CrowdStrike, a major AI stock, and instead, Alphabet is acquiring cloud security company Wiz for $32 billion, indicating a strategic shift in investment focus [3][5][11] Investment Strategy - CapitalG sold its remaining shares of CrowdStrike, which accounted for 15% of its marketable equity portfolio, as the stock's valuation became a concern [5][6] - CrowdStrike is recovering from a significant outage that impacted its operating margin, which fell to 18% from 23% year-over-year, but revenue is growing rapidly at 42% year-over-year [7][8] - The company is enhancing its offerings with agentic AI capabilities through its new Charlotte platform, which aims to improve security threat responses [10] Competitive Landscape - Google Cloud is the third-largest public cloud platform, with a Q2 run rate of $54.5 billion, but it lags behind Microsoft's Azure, which has a revenue run rate of $75 billion [12] - The integration of Wiz's cloud security solutions into Google Cloud could enhance revenue and customer retention, but Alphabet must balance this to avoid alienating existing customers [13][15] - The acquisition of Wiz, while costly at $32 billion, is seen as a strategic move to strengthen Google Cloud's position in the market, especially given Alphabet's substantial cash reserves of $95 billion [15][16]