You can learn all about the details of how and why Alpha was developed:

https://www.computerhistory.org/collections/catalog/10273826...

Its in Part 2.

If I remember correctly, it was basically 64bit because Alpha was basically a (good) virus inside of DEC. Or maybe like secret society that revolted against the leader of the company.

Olson had killed 32 bit PRISM and they already had VAX that was 32 bit and people making processor for it. To get people all over DEC to buy into Alpha (Alpha barley had any budget of it own) it had to be something new, and winning 64 bit did make sense.

Olson really killed basically everything that make sense, that DEC survived so long with Olson as CEO is kind of crazy. The amount of horrible decision starting as early as the early 70s is kind of crazy.

VAX had also been early, driven by Gordon Bell not Olson, very few of the competitors had 32 bit processors then, and people like Data General and Prime struggled to develop them in response. Funny enough a hardware guy on the VAX team basically proposed RISC-like architecture but it was rejected because they optimized for code size. To bad that they didn't hit on the idea of compressed instructions.