Google to Spend $7 Billion on Data Centers and Office Space in 2021

Stephen Lam | Reuters
  • Google said it will spend $7 billion on office space and data centers this year.
  • Some $1 billion will go specifically toward California, where other tech companies have divested amid the pandemic.
  • CEO Sundar Pichai said the expansions in places like Atlanta and Washington, D.C., will "bring more racial diversity to more jobs and investment to diverse communities."

Google says it plans to spend more than $7 billion on real estate across the U.S. in 2021 as it resumes spending in the wake of the Covid-19 pandemic.

The company said the money will go toward expanding offices and data centers across 19 states, creating what will amount to at least 10,000 full-time jobs. Some $1 billion will go specifically toward California.

"Coming together in person to collaborate and build community is core to Google's culture, and it will continue to be an important part of our future," CEO Sundar Pichai said in an blog post Thursday. "So we continue to make significant investments in our offices around the country, as well as our home state of California, where we will be investing over $1 billion this year."

Google parent company Alphabet paused its real estate spending last year in the wake of the pandemic and Google's first-ever year-on-year revenue decline in the second quarter of last year.

The data center expansions come as the company aggressively grows its cloud business. The company broke out operating results for that business in its last earnings report, revealing that it lost $5.61 billion on $13.06 billion revenue last year. Google Cloud CEO Thomas Kurian told investors last month that he's focused on growing the business now, with an eye toward profitability down the road.

The company plans to return workers to offices beginning this fall. Pichai previously said Google wouldn't adopt a permanent remote work plan, expecting most employees to show up to assigned offices three days a week starting in September.

As a part of the expansions, Pichai said the company will add thousands of new roles at its offices in Atlanta, Washington, D.C., Chicago and New York.

"This will help bring more jobs and investment to diverse communities as part of our previously announced racial equity commitments," Pichai said, adding that 2020 was its biggest year ever for hiring Black and Latinx employees in the U.S.

The company is planning on opening new offices in Seattle, Houston and Mississippi. It's in the process of planning several, massive ground-up developments in various cities, including near its headquarters in Mountain View, California, where it is incorporating housing.

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