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Why Google Is Spending $13 Billion on Data Centers and Offices

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Google will spend $13 billion on data centers and offices this year

As we mentioned in the previous article, Alphabet’s (GOOG) (GOOGL) Google has been doubling down on its Cloud segment. Its surging capex has boosted its market share in the space.

Google announced on February 13 that it would be spending $13 billion on data centers and offices in the United States this year. In comparison, the search engine giant spent $9 billion on data centers and offices in the country in 2018.

Google will be developing new data centers in Nebraska, Nevada, Ohio, and Texas. The tech giant will also be expanding its existing data centers in Oklahoma and South Carolina.

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Google wants to catch up to Amazon and Microsoft

As we mentioned earlier, Google is looking to gain ground on the leaders in the cloud space, Amazon (AMZN) and Microsoft (MSFT).

Google’s Other Revenue segment, which includes its cloud, Play Store, and hardware businesses, continued to grow quickly in the fourth quarter of 2018. In the quarter, the segment made $6.49 billion, a rise of 30.1% year-over-year.

Google’s huge investments in data centers and its cloud business could be crucial to its growth, as the cloud infrastructure market still has a lot of room to grow.

Google wants its fast-growing segments, including its cloud business, to be the drivers of its growth in the future as its core search engine business cools down and its pricing power in the business erodes.

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