Google plans to spend $7 billion this year on data centers and offices across the U.S., which represents a $3 billion drop from 2020 when CEO Sundar Pichai pledged to spend $10 billion.
Pichai, in a blog post today, said the $7 billion investment will help speed the economic recovery from the pandemic, and he indicated that the future of work at Google is in the office and doesn’t involve relocating its headquarters outside of Silicon Valley. This is a stark contrast to other tech giants including Hewlett Packard Enterprise that, during the pandemic, announced plans to move headquarters outside of California and companies like Dell Technologies that have said the future of work is hybrid at best.
“Coming together in person to collaborate and build community is core to Google’s culture, and it will be an important part of our future,” Pichai wrote, adding that Google will invest more than $1 billion in its home state of California. It will also add “thousands of roles” at its offices in Atlanta, Chicago, New York, and Washington, D.C. The total $7 billion investment will create at least 10,000 new, full-time jobs in the U.S., Pichai said.
The new jobs will focus on “diverse communities” and advance Google’s racial equity commitments, Pichai said. “We’re already making progress: 2020 was our largest year ever for hiring Black and Latinx Googlers in the U.S., both overall and in tech roles.”
In addition to investing in new offices, Google will expand its data centers in Nebraska, South Carolina, Virginia, Nevada, and Texas. Pichai said that Google’s existing data center sites in Nebraska, Ohio, Texas, and Nevada will be “fully up and running in 2021.”
Google’s Cloud Aspirations StallGoogle’s $7 billion pledge comes as the No. 3 cloud giant struggles to win market share away from No. 1 Amazon, which holds about 32%, and No. 2 Microsoft with 20%. For comparison, Google’s fourth-quarter 2020 market share held steady at about 9% despite heavily investing in its cloud business.
Google’s cloud business reported an operating loss of $5.61 billion last year on $13.06 billion in revenue for 2020.
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