Alphabet is giving investors a benchmark for its artificial-intelligence infrastructure investment: Google Cloud CEO Thomas Kurian said AI servers recover their cost in less than two years, while servers using proprietary Tensor Processing Units (TPUs) do so in less than one year. The disclosure came as Alphabet raised full-year 2026 capital-expenditure guidance to $195 billion-$205 billion. Google Cloud revenue rose 82% year over year to $24.77 billion in the second quarter, with operating income roughly tripling to $8.8 billion and the operating margin reaching approximately 35.6%, or about 36%, versus roughly 21% a year earlier. Its contracted backlog, or remaining performance obligations, reached $514 billion, with more than 50% expected to convert to revenue within 24 months. Alphabet said nearly 90% of Fortune 100 companies use Gemini Enterprise. The investment cycle is straining cash generation: second-quarter free cash flow was negative $5.9 billion versus $24.5 billion a year earlier, while capital expenditures reached $44.9 billion. Alphabet's revenue and operating profit nevertheless strengthened, though investors are weighing whether infrastructure returns will arrive before higher depreciation and further spending increase financial pressure.