Google’s parent company, Alphabet, saw its share price dip sharply after it reported a surprise negative cash flow of $9 billion, largely due to its investments in digital infrastructure.

The company’s earnings for the three months to the end of September showed its revenue grew 25 percent to $127.58 billion, slightly less than the expected $128.22 billion.

Negative cash flow, which had been expected to be around $2.7 billion, came in at $9.01 billion. CFO Anat Ashkenazi told investors that the larger-than-expected number was “driven by our investments in capex.”

Google has been investing heavily in its data center infrastructure to support its AI products, and has started selling its custom-designed TPU AI chips to third parties.

It is working with Blackstone to create a US-based cloud platform offering its TPUs, named Crux AI. Neocloud Fluidstack is also known to be deploying TPUs for Anthropic in a series of Google-backed deals.

This week, it was revealed that TPUs would be available on Oracle’s OCI cloud platform from next year. Oracle’s Karan Batta told DCD that the deal is a “multi-year, multi-gigawatt” partnership.

All this requires a lot of money up front, and Google spent $51.36 billion in capex in the last quarter, while maintaining its guidance for annual spending of up to $205 billion in 2027, with $300 billion to come in 2028.

The company’s share price slumped as much as 10 percent in after-hours trading, ahead of the markets opening on Thursday.

Ashkenazi added that the company’s cash flow had been “negatively impacted by the buildup of inventory for TPU system sales” as well as a $5.2 billion cash payment for a 2018 European Commission fine over breaching EC antitrust regulations with its Android mobile operating system.

There was better news in its Google Cloud division, where quarterly revenue grew 108 percent Year-on-Year, to $30.7 billion.

Google's results were published on the same day that rival hyperscaler Microsoft announced its results, and saw its share price climb as a result. Microsoft reported positive free cash flow of $18.63 billion, despite being heavily invested in its own AI infrastructure build-out, with capex of $45.2 billion.