Google announces $40 billion Texas investment to expand AI

Alphabet Inc subsidiary Google announced Friday a major USD40 billion investment in Texas through 2027 to build new cloud computing and artificial intelligence infrastructure, marking the latest in a series of massive technology investments in the US state.

The investment will fund new data centre campuses in northern Texas, adding to Google's presence in the Lone Star State that spans more than 15 years, the company said.

"Our latest investment in Texas is designed to not only support Texas' workforce and infrastructure, but to ensure the US retains the technical backbone to lead the world in AI," Google said in a blog post.

Google's announcement continues a trend of major technology companies making substantial investments in Texas.

The state's deregulated energy market and access to renewable energy sources have made it particularly attractive for data center development, even as energy demands of these facilities have raised concerns about grid stability, particularly following 2021 winter storms that caused widespread outages.

ChatGPT-maker OpenAI Inc has made one of the most ambitious commitments through its USD500 billion "Stargate" project, with its flagship data center campus in Abilene, Texas.

Meta Platforms Inc, Facebook's parent company, has invested billions in data centres in Fort Worth, while Tesla Inc relocated its headquarters to Austin in 2021 and built a major manufacturing facility there.

Oracle Corp also moved its headquarters to Austin, and Samsung Electronics Co announced a USD17 billion semiconductor plant in Taylor, Texas.

As part of its commitment, Google is establishing a USD30 million Energy Impact Fund to aid energy initiatives in Texas – as communities increasingly worry about the strain data centres put on local power supply.

Google pledged to bring new energy resources onto the grid and pay for costs associated with its operations while supporting community energy efficiency initiatives.

The company said in its latest earnings call that it expects 2025 capital expenditures of USD91-$93 billion, reflecting massive investments in data centres and computing power to fulfil its AI ambitions.