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Nvidia-linked AI server costs could rise 15% for some customers
The report cites expectations that Alphabet is exposed to higher memory costs and that it is planning $195 billion to $205 billion in AI infrastructure spending this year.
Some of Nvidia’s largest customers have been warned that AI servers based on the Grace Blackwell and Vera Rubin chip platforms could cost more than 15% extra in early 2027 as memory prices rise, according to Yahoo Finance. The outlet notes that Alphabet, which both buys Nvidia hardware and sells competing stacks based on its TPUs, would be unusually exposed to those cost increases.
Yahoo Finance says Alphabet is accelerating its own AI infrastructure buildout, committing $195 billion to $205 billion in capital spending this year. It also highlights that a partnership with Marvell could generate up to $120 billion in custom-chip sales through fiscal 2033.
On the demand side, the outlet reports that Alphabet’s Google Cloud revenue grew 82% in the June quarter to $24.8 billion, with cloud backlog reaching $514 billion. Alphabet expects to recognize just over 50% of that backlog as revenue over the next 24 months.
The capital spending is described as a near-term pressure point, with Yahoo Finance citing negative Q2 free cash flow of $5.9 billion and long-term debt rising to $98.2 billion. It also states Alphabet raised about $70 billion in combined equity and debt to help fund the AI buildout.