Google CEO Sundar Pichai cites compute shortages for 2027

Alphabet CEO Sundar Pichai has stated that securing computing capacity for 2027 is “incredibly difficult.” Despite Alphabet’s significant capital expenditure plans, the company faces challenges in meeting the projected demand for agentic AI—systems capable of performing multi-step tasks autonomously.

Pichai noted that current capacity is largely determined by infrastructure decisions made in 2024, before the full scale of agentic AI demand was realized. To mitigate these constraints, Google has utilized short-term leases to support customers. This shortage appears to be an industry-wide trend, with reports indicating that Amazon Web Services has also reached capacity through 2028.

Google is reportedly prioritizing AI research and development over immediate revenue when allocating available compute resources. The broader industry is responding with massive infrastructure investments, including tens of gigawatts of data center capacity under construction and over $1 trillion in non-cancellable lease contracts signed this year.