Google Will Invest $10 Billion in U.S. Data Centers and Offices in 2020

Search giant invested $13 billion in similar facilities last year

a google office sign
Google has a presence in 26 states, including the 11 it’s investing more in this year. Getty Images
Headshot of Scott Nover

Google CEO Sundar Pichai announced Wednesday that the search giant will invest more than $10 billion in new offices and data centers in 11 states this year—Colorado, Georgia, Massachusetts, Nebraska, New York, Oklahoma, Ohio, Pennsylvania, Texas, Washington and California. 

This will add to the $13 billion Google invested in similar U.S. projects in 2019, up from $2.5 billion in similar infrastructure projects in 2018.

“These investments will create thousands of jobs—including roles within Google, construction jobs in data centers and renewable energy facilities, and opportunities in local businesses in surrounding towns and communities,” Pichai wrote in a blog post.

Pichai cites a Progressive Policy Institute report that cited Google parent company Alphabet as the largest U.S. investor last year. Michael Mandel, chief economic strategist at PPI, feels strongly that Alphabet’s investments are a net positive for the U.S. economy.

“We track domestic investment each year in our Investment Heroes report,” Mandel said. “In 2019, Alphabet came in No. 1 for the first time, followed by AT&T and Amazon. Companies that invest in the U.S., like Alphabet, AT&T and Amazon, are contributing to productivity growth, job creation and higher wages. We would all be better off if more companies followed Alphabet’s lead and invested in the domestic economy.”

Google has a presence in 26 states, including the 11 it’s investing more in this year.

Pichai’s mention of renewable energy facilities is conspicuous following a strong public statement from Larry Fink, CEO of BlackRock, one of Google’s largest investors. In January, Fink used his annual letter to urge—or, depending on your reading, threaten—chief executives to adopt more sustainable policies or risk losing his firm’s investment. Google ranks third in total value among BlackRock’s investment portfolio at about $47 billion in shares. And Fink’s language wasn’t subtle, saying the firm would be “exiting investments that present a high sustainability-related risk.”

When asked about the sustainability of the planned infrastructure investments, a Google spokesperson pointed to its previous $2 billion commitment to new energy infrastructure made in September.

Google, and parent company Alphabet, have been staring down the barrel of regulation in recent months, and have been on the receiving end of calls from presidential candidates to be broken up. Whether or not this investment is meant to appease U.S. regulators should not necessarily matter, Mandel noted.

“Yes, the high level of investments affect the ongoing discussions about anticompetitive practices, but for good economic reasons,” he said. “Generally speaking, monopolists tend to want to reduce investment and restrict output in order to drive up prices. Instead, we see high levels of investment, which are accompanied by a sharp fall in internet advertising prices.

“It’s much harder to make a case for anticompetitive behavior if a company is investing a ton of money and prices in its main markets are falling.”

@ScottNover Scott Nover is a platforms reporter at Adweek, covering social media companies and their influence.