As Wall Street Frets Over Alphabet's AI Spending Binge, Mark Cuban Says Google Is Simply Doing What Worked in 1998: 'We Needed to Have More Than Anyone Else… and We Did'
As Wall Street Frets Over Alphabet's AI Spending Binge, Mark Cuban Says Google Is Simply Doing What Worked in 1998: 'We Needed to Have More Than Anyone Else… and We Did'.
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Billionaire entrepreneur Mark Cuban is defending Alphabet Inc. 's massive artificial intelligence capital expenditures, likening the tech giant's strategy to the 1998 internet boom where companies must "push in all their chips" to secure dominance.
Responding to an X user questioning if Alphabet's capital spending was simply "building future pickle ball courts," Cuban drew direct parallels to the late 90s.
"Kind of like 1998 and buying all the servers and bandwidth we could find," Cuban posted. "We needed to have more than anyone else… And we did."
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Cuban argues the AI race requires similar aggression. He emphasized that no company wants to achieve market dominance only to "run out of capacity." To prevent this bottleneck, tech giants must "push in all their chips and commit to building as much capacity as they can," he explained.
Kind of like 1998 and buying all the servers and bandwidth we could find to stream audio and video. We needed to have more than anyone else, so we could stream more than anyone else. And we did. We dominated streaming and it wasn't close. Same thing is happening with… https://t.co/1L7B7aauMw
Cuban's defense arrives as Alphabet's decision to raise its 2026 CapEx guidance from $195 billion to $205 billion sparks mixed reactions among analysts.
The Future Fund's Gary Black warned this aggressive spending could "trigger a new CapEx arms race," while CNBC's Jim Cramer noted investor anxiety over Alphabet's nearly $6 billion in negative free cash flow. Dan Ives added that hyperscaler spending remains the "laser focus" for tech investors.
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Conversely, Gene Munster of Deepwater Asset Management argued the market is overreacting to fractional misses in Search margins. Pointing to Google Cloud's 82% year-over-year revenue jump, Munster declared, "The Cloud number is the most important number."
Strategist Shay Boloor echoed this optimism, noting Google Cloud's $514 billion backlog proves "demand is already translating into insane fundamentals."
Overall, Alphabet's second quarter revenue hit $119.80 billion, beating estimates. Driven by demand for AI infrastructure, Cloud revenue alone reached $24.77 billion.
Despite massive capacity expansion, Alphabet CFO Anat Ashkenazi admitted, "the demand still outpaces that investment."
As energy and data centers become the new constraints, Cuban playfully conceded they will remain bottlenecks—"Until they are pickle or padel courts."
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