Google’s Sundar Pichai: ‘Vital’ $9.5B Data Center, Office Investments In 2022

‘Our investments in data centers will continue to power the digital tools and services that help people and businesses thrive,’ said Google CEO Sundar Pichai.

Google is investing a whopping $9.5 billion in data centers and U.S. offices in 2022 that will create “at least” 12,000 new full-time jobs by the end of 2022, said Google CEO Sundar Pichai.

“Our investments in data centers will continue to power the digital tools and services that help people and businesses thrive,” said Google CEO Pichai in a blog post Wednesday.

As the Mountain View, Calif.-based search giant’s Google Cloud service business soars, Google is hiring more employees and building new data centers to meet the high demand for its cloud services. In Google Cloud’s most recent fourth quarter, sales grew 45 percent year over year to $5.5 billion.

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Pichai said he’s bullish about Google’s $9.5 billion bet on data centers and offices in the U.S., which will provide “vital anchors” to communities and customers.

Google’s Data Center Plans For 2022

Google plans to spend billions this year on data centers in Tennessee, Virginia and Oklahoma. The company will also invest in its existing data centers in Georgia, Iowa, Nebraska and Texas.

Additionally, Google’s data center in Storey County, Nev., has now become operational. Google will also invest millions more in its Henderson, Nev., data center.

“In the U.S., over the past five years, we’ve invested more than $37 billion in our offices and data centers in 26 states, creating over 40,000 full-time jobs. That’s in addition to the more than $40 billion in research and development we invested in the U.S. in 2020 and 2021,” said Pichai.

Allen Falcon, CEO of Westborough, Mass.-based Google Cloud partner Cumulus Global, said the data center investment will enable Google to better compete against the likes of cloud competitors such as Amazon Web Services, Microsoft Azure and IBM Cloud Services.

“The expansion is necessary not only to not even to keep up, but to stay ahead of the curve,” said Falcon. “They need the resources in place so as new customers come on board and as existing customers expand—resources will never become a gating factor. … It‘s really creating the perception of infinite resources.”

Falcon is bullish on Google’s future as it builds out its data center footprint, product portfolio via acquisitions and ecosystem of partners.

“I look at the data center expansion, I look at their acquisitions and I see Google really bringing to fruition a strategy that says, ‘Let‘s create the ecosystem equal to the core capabilities of the technologies and the services we offer,’” he said.

Google, alongside major cloud competitors Amazon, Microsoft and IBM, have the broadest global data center footprints among the world’s top cloud and internet service providers, according to Synergy Research Group.

“Each has 60 or more data center locations with at least three in each of the four regions—North America, APAC, EMEA and Latin America,” Synergy Research Group said in a report.

Google is one of the heaviest spenders on future new data center pipeline projects, while the company is also one of the world leaders in data center capacity.

“As we work towards running our offices and data centers on carbon-free energy 24/7 by 2030, we’re aiming to set new standards for green building design—including pursuing certification through the International Living Future Institute for buildings like our new office in Sunnyvale, Calif.,” Pichai said in the blog post.

In 2021, Google Cloud Platform (GCP) recorded more than 80 percent growth in total deal volume compared to 2020, and more than 65 percent growth in the number of deals exceeding $1 billion.

Google Cloud now has an annualized revenue run rate of $22.16 billion.

“The future looks bright for hyperscale operators, with double-digit annual growth in total revenues supported in large part by cloud revenues that will be growing in the 20 [percent] to 30 percent per year range. This in turn will drive strong growth in capex generally and in data center spending specifically,” said John Dinsdale, a chief analyst at Synergy Research Group in a recent research note.

Google U.S. Offices Growth Plans For 2022

After more than two years of working from home due to the global COVID-19 pandemic, Google employees were told to return to offices on April 4 in many U.S.-based locations, including in the Bay Area.

Expectations are employees will go into the office at least three days per week, depending on their role within the company, Google has said.

As part of Google’s $9.5 billion investment plan in 2022, the company will pour money into new offices in cities like Atlanta, Austin and Portland, Ore.

Google will also be revamping some of its office buildings in America, including in Silicon Valley and New York City.

“It might seem counterintuitive to step up our investment in physical offices even as we embrace more flexibility in how we work,” said Google’s Pichai. “Yet we believe it’s more important than ever to invest in our campuses and that doing so will make for better products, a greater quality of life for our employees, and stronger communities.”