Alphabet Inc.’s Google plans to invest $40 billion in three new Texas data centers, part of an effort to add artificial intelligence computing power in a state that’s also drawn multibillion investments from competitors such as OpenAI and Anthropic PBC.
The investment will be made through 2027, Google said in a statement Friday. One data center will be in Armstrong County, in the Texas panhandle, and two in Haskell County, a stretch of West Texas near Abilene. One of the Haskell facilities will be co-located with a new solar and battery energy storage plant designed to ease the impact on the power grid.
“This investment will create thousands of jobs, provide skills training to college students and electrical apprentices, and accelerate energy affordability initiatives throughout Texas,” Alphabet Chief Executive Officer Sundar Pichai said at an event near Dallas, where the company already has two data center locations.
Texas has become a magnet for data centers as companies chase relatively cheap energy, vast tracts of land, and a state eager to host the infrastructure that’s powering the artificial intelligence boom. In outlining its latest plans, Google emphasized its commitment to “bringing new energy resources onto the grid, paying for costs associated with its operations, and supporting community energy efficiency initiatives.”
The company also said an electrical-training program will boost the number of apprentices in Texas with funding from Google.org’s AI Opportunity Fund.
“Texas will be the centerpiece for AI data centers for Google,” Governor Greg Abbott said at the event with Pichai. “They can come here and operate here knowing that Texas moves at the speed of business.”
Alphabet shares rose 1.7% in extended trading after closing at $276.41 in New York.
Investment Plans
Texas has been gaining commitments from other companies as well. Earlier this week, Anthropic announced that it will invest $50 billion in data centers across the US, including in New York and Texas, which has an abundance of land and relatively cheap energy.
The first data center being built by the Stargate venture backed by ChatGPT creator OpenAI, Oracle Corp. and Softbank Group Corp. is in Abilene, Texas, and executives have telegraphed they’ll locate more in the state.
Meta Platforms Inc. is also building a new gigawatt-sized data center in Texas. For reference, a gigawatt of electricity can power 750,000 homes at any given moment. Microsoft Corp. inked a nearly $10 billion deal earlier this month for five years’ worth of computing capacity in Texas.
Fermi Inc. — the real estate investment trust co-founded by former Texas Governor Rick Perry, who also served as energy secretary during President Donald Trump’s first term — has plans to build four nuclear-power reactors in the state for a private data-center campus.
With data centers expanding rapidly in Texas and across the US, investors are showing signs of concern that vast spending plans will far outstrip the revenue that businesses can generate from the AI services powered by data center buildouts.
Multibillion-dollar spending pledges are commonplace for Google, which is expected to drop more than $90 billion on capital expenditures this year alone — a significant rise from earlier estimates, with the bulk going into servers, custom chips and new data centers to support its AI and cloud businesses.
Just in the past two months, the company has announced a $15 billion plan to build an AI infrastructure hub in southern India; pledged to invest $6.4 billion in computing resources and operations in Germany; and committed to spending more than $6.5 billion in the UK to help spur more AI development.
The spending spree underscores the company’s ambition to scale globally and move beyond its legacy search advertising business, while testing how quickly the company can turn its heavy AI infrastructure spending into returns demanded by investors.
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