Google says it will spend $7B+ on US data centers and offices in 2021
Google LLC Chief Executive Officer Sundar Pichai revealed in a blog post today that the search giant will spend more than $7 billion on expanding its U.S. data center and office footprint this year.
Google is planning to expand its data centers in Virginia, Nebraska and Nevada as part of the investment. Two of the facilities being upgraded, in Papillion, Nebraska, and Henderson, Nevada, are newly built sites that are receiving enhancements within only months of becoming operational.
Google’s office footprint, in turn, is set to grow with the addition of four new locations this year. The search giant has plans for a Google Cloud engineering site in Durham, North Carolina and a Google Operations Center in Southaven, Mississippi, as well as new Houston and Portland offices.
A big portion of the more than $7 billion investment announced today will go toward expanding existing locations. Pichai detailed that Google will invest more than $1 billion to grow its California presence and will create thousands of new positions in Atlanta, Washington, D.C., Chicago and New York. The company will launch smaller hiring initiatives in Detroit, Ann Arbor, Cambridge, Pittsburgh and Austin, among other locations.
Put together, Google expects the expansion to create at least 10,000 new jobs. The search giant currently has about 84,000 full-time employees in the U.S.
Pichai announced the investment plan in conjunction with the release of Google’s annual 2020 U.S. Economic Impact Report this morning. “In 2020, Google Search, Google Play, YouTube and Google advertising tools helped provide $426 billion of economic activity for more than 2 million American businesses, nonprofits, publishers, creators and developers,” Pichai detailed in the blog post announcing the investment.
Google’s rapid expansion of its workforce and data center network helps sustain the rapid top-line expansion of its business. The search giant’s parent company, Alphabet Inc., generated $56.9 billion in revenue during the fourth quarter thanks to a 23% year-over-year sales jump that helped it top the consensus estimate by nearly $4 billion.
Based on Alphabet’s fourth-quarter earnings report, the data center expansions it’s planning for 2021 could make up a relatively sizable portion of the $7 billion investment announced today. The company disclosed that Google Cloud lost $5.6 billion on $13 billion in revenue for 2020, a year that saw the launch of four new cloud data center clusters. Chief Financial Officer Ruth Porat told investors that the business’ loss was expected to rise in the first quarter of 2021, then moderate from there.
Google’s infrastructure budget also includes other big items besides data centers. Google is actively expanding the network of subsea internet cables linking its data centers, which is already so extensive the company is considering to use it for submarine earthquake detection.
The search giant has also made significant investments in sourcing renewable energy for its facilities. This latter investment can be expected to continue, and possibly grow, as Google works toward its goal of switching entirely to renewable energy by 2030.
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