GOOG · 10-Q · 2026Q1 · Full report

R&D Investment in AI

Alphabet Inc. · 2026-04-30 · Importance 61 · Surprise 66

Research and development expenses increased $3.5 billion year over year, primarily driven by $2.5 billion higher employee compensation and $506 million higher depreciation, reflecting both hiring and technical infrastructure investments. Alphabet centralizes certain AI research and development at the Alphabet level to develop frontier models that serve multiple businesses, and Alphabet‑level activities primarily reflect expenses related to this shared AI R&D. The higher depreciation component indicates capital deployment into AI compute and related infrastructure that supports model development and deployment. The combination of increased headcount-related compensation and infrastructure suggests sustained investment into Gemini, Vertex AI, and other enterprise AI capabilities.