Google to Pour $40 Billion into 3 New Texas Data Centers
Alphabet Inc.’s Google is set to invest $40 billion in three new data centers in Texas to enhance artificial intelligence computing capabilities in a state that has attracted major investments from rivals like OpenAI and Anthropic PBC. In a statement released on Friday, Google announced that the investment will be made through 2027, with one data center located in Armstrong County in the Texas panhandle and two others in Haskell County near Abilene, where one facility will be built alongside a new solar and battery energy storage plant to reduce strain 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,” said CEO Sundar Pichai, where Google already operates two facilities. Texas has become a prime destination for data centers, offering companies affordable energy, extensive land availability, and a favorable regulatory environment for the infrastructure powering the AI boom, with Google emphasizing its commitment to supporting grid resources, operational costs, and community energy initiatives.
The company also announced that an electrical-training program will increase the number of apprentices in Texas, supported by Google.org’s AI Opportunity Fund, while Governor Greg Abbott highlighted that “Texas will be the centerpiece for AI data centers for Google,” noting that the state “moves at the speed of business.” Texas has also been securing commitments from additional companies as Anthropic announced a plan to invest $50 billion in data centers across the U.S., including locations in New York and Texas, where plentiful land and low-cost energy attract large-scale infrastructure projects. The first data center built by the Stargate venture—backed by OpenAI, Oracle, and Softbank—is already situated in Abilene, Texas, with executives indicating more centers are planned. Meta Platforms Inc. is constructing a gigawatt-sized data center in the state, while Microsoft recently finalized a nearly $10 billion agreement for five years of computing capacity in Texas.
Fermi Inc., a real estate investment trust co-founded by former Texas Governor Rick Perry, who also served as U.S. energy secretary, plans to build four nuclear-power reactors in the state for a private data-center campus as the rapid expansion of data centers raises investor concerns that spending may exceed the revenue businesses can generate from AI services dependent on this infrastructure. Google regularly announces multibillion-dollar spending commitments, and projections indicate that the company will invest more than $90 billion in capital expenditures this year, a substantial increase from previous estimates, largely directed toward servers, custom chips, and new data centers to strengthen its AI and cloud capabilities. In the last two months, the company has unveiled a $15 billion initiative to build an AI infrastructure hub in southern India, committed $6.4 billion to computing resources in Germany, and allocated more than $6.5 billion in the UK to support AI development initiatives.
The spending surge underscores Google’s ambition to expand globally and diversify beyond its traditional search advertising business while evaluating how quickly it can convert massive AI infrastructure investments into the returns expected by investors. The expansion reflects the intensifying competition between global tech giants to secure the computational power necessary for advanced AI systems, positioning Texas as a central hub of the emerging AI economy. As the pace of development accelerates, the question of how efficiently companies like Google can monetize unprecedented spending on data centers and specialized hardware remains central to market sentiment, even as the company pushes forward with its global AI and cloud strategy.
