Alphabet has reportedly confirmed that its $75 billion AI investment plan will go ahead despite investor uncertainty generated by Trump's tariffs that have recently shaken the economic outlook.

On Wednesday Alphabet confirmed the funding plans to boost its AI and data centre capacity, adding that investors should not panic about the current tariffs imposed by Donald Trump, as AI is still generating good returns, Reuters reported.

Alphabet chief executive Sundar Pichai said that the plan will focus on investments in chips to build the servers Alphabet needs to enhance its cloud offering for products such as Search and its Gemini model.

Despite concerns over the fees and high capital costs associated with AI projects, Pichai emphasised the substantial potential of AI developments and the strong returns expected from investments in the field.

On Wednesday, speaking at the company's annual conference for its cloud computing unit, he said: "The opportunity with AI is as big as it gets.”

At the event, Sachin Gupta, vice president and general manager of Google Cloud's infrastructure unit, addressed concerns about the potential increase in data centre building costs due to US tariffs. He said that while the cost of importing hardware could increase, customer demand continues to drive the need for more investment.

"We're all processing what's happening with tariffs," he told Reuters.

US president Donald Trump announced a significant change in tariff policy on Wednesday, authorising a 90-day pause on reciprocal tariffs for all countries except China, which saw its levy increased to 125 per cent. The move, dubbed ‘Liberation Day’, had immediate effects on the global market.

The universal 10 per cent tariffs remain in place, but the suspension of the targeted tariffs led to a positive response from the US markets, particularly on tech stocks.

On Wednesday, Alphabet's shares closed up almost 10 per cent, a boost that is part of the $1.5 trillion market value gained by the ‘magnificent seven’ technology stocks, Reuters reported. The magnificent seven are a group of major tech firms including Amazon, Meta, Nvidia and Tesla, whose shares have been showing significant growth and performance.

Over the past week, other technology giants, including Meta and Microsoft, reiterated that their plans to spend $65 billion and $80 billion respectively on AI infrastructure will go ahead despite market turbulence.

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