Alphabet CEO Sundar Pichai gave a shoutout to DeepSeek, calling the Chinese AI company’s work “tremendous” during the company's latest earnings call. But don’t think that means Alphabet is slowing down its own AI ambitions; the company announced it would boost capital expenditures to $75 billion this year, a 42% increase.

The praise comes after DeepSeek rattled the industry by claiming its AI models are significantly cheaper to train, even suggesting its reasoning model beats OpenAI's o1 on certain benchmarks. This led to speculation that demand for expensive AI chips and data centers could decrease. Pichai countered that some of Google's Gemini models are "just as efficient" as DeepSeek's.

Like Meta, Alphabet seems unfazed by the prospect of cheaper AI models taking over, betting that lower costs will actually increase demand for its services. Pichai explained that the company is "excited about the AI opportunity" because the cost of using AI "is going to keep coming down, which will make more use cases feasible."

Alphabet plans to capitalize on this surge in AI usage by leveraging its existing base of billions of users. "It's as big as it comes, and that's why you're seeing us invest to meet that moment," Pichai said.