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Google to invest $13 billion in US data centers and offices this year

2019-05-30

Google (GOOGL) is planning to invest $13 billion in data centers and offices in more than a dozen US states this year, which it claims could pave the way for hiring tens of thousands of employees, according to a blog post from CEO Sundar Pichai on Wednesday.


"Our expansion across the U.S. has been crucial to finding great new talent, improving the services that people use every day, and investing in our business," Pichai wrote in the post. He said this will be the second year in a row that Google will grow "faster outside of the Bay Area than in it."


The company isn't alone. Other tech giants like Apple (AAPL) and Amazon (AMZN) have made splashy announcements about expanding their US footprints in recent years, including Amazon's very public search for a second headquarters. These investments come against the backdrop of shifting political realities and technology trends.


As tech companies grow larger and expand into media, advertising and hardware, they are also turning to newer tech hubs like Austin and New York City for talent. At the same time, the push into the fast-growing cloud computing market requires more investment in data centers in the US and abroad.


On a conference call with analysts after the Alphabet earnings report in February, Pichai said investing in data centers is necessary to "lay the groundwork" for its bets on cloud computing, advertising, YouTube and machine learning.

While Google may be expanding beyond Silicon Valley, it will almost certainly find itself competing for talent against its usual Silicon Valley rivals. Google plans to double its workforce in Virginia, with a new office and data center development, according to the blog post. It also previously announced plans to invest more than $1 billion to double its workforce in New York City.

Amazon, meanwhile, is planning to hire tens of thousands of workers in both Virginia and New York City as part of its office expansion -- assuming it doesn't retreat from the latter.


Pichai says Google will open new data centers in Ohio, Nebraska and Nevada, expand its data centers in Oklahoma, and open a new office in Georgia. In the process, the company could shore up its workforce in America's heartland at a time when President Donald Trump has called for companies to hire more workers in the US.


President Trump has previously applauded Amazon for its 2017 announcement pledging to hire 100,000 US workers and called Apple CEO Tim Cook to thank him for the company's plans to invest $30 billion in US facilities over a five-year period.

Pichai said Google hired more than 10,000 people in the US in the last year and invested more than $9 billion in its US footprint. To put that in context: Alphabet, Google's parent company, reported having 98,771 employees worldwide at the end of 2018.


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