Why Big Tech is Flocking to Texas – The Real Meaning Behind Google’s $58 Billion Investment

Google has announced a $40 billion investment in Texas, which is approximately 58 trillion won in our currency. As of November 15, 2025, this is not just a story about data center expansion. It is part of a phenomenon where the entire big tech industry is flocking to Texas, and a closer look reveals a truly fascinating shift in the industrial landscape.

According to the investment plan announced by Google CEO Sundar Pichai alongside Texas Governor Greg Abbott, three new data centers will be established in Texas by 2027. One will be located in Armstrong County on the Panhandle Plains in the northern part of the state, and two will be in Haskell County in the western part of the state. Notably, one of the data centers in Haskell County will be built alongside a new solar and battery energy storage facility.

What’s truly important here is that Google is not the only company making such moves. According to reports, OpenAI has chosen Texas as the first location for its ‘Stargate’ data center in collaboration with Oracle and SoftBank, and Meta is also constructing a gigawatt-scale data center in Texas. Microsoft has signed a $10 billion contract to secure computing capacity in Texas for the next five years, and Anthropic has announced a $50 billion investment in data centers across the U.S., including Texas.

Bloomberg analyzed that the reason for this concentrated investment is “abundant land and relatively low energy prices,” but this is merely a surface-level reason. A deeper look reveals that it is a strategic choice to survive in the infrastructure competition of the AI era.

The Power Game of the AI Era

As of 2025, AI models are becoming increasingly complex. The amount of power required to train and operate large language models like GPT-4, Claude 3.5, and Gemini Ultra is growing exponentially. Google’s announcement of a new ‘Energy Impact Fund’ exceeding 6,200 MW can be understood in this context. To give you a sense of how large 6.2 GW is, it is roughly the capacity of six nuclear power plants.

Texas’s appeal goes beyond just cheap electricity. Texas is one of the leading states in the U.S. for renewable energy production, ranking first in wind power generation nationwide. Its solar power capacity is also rapidly increasing. Google’s announcement to build the Haskell County data center with solar and battery storage facilities appears to be a strategy to leverage this renewable energy infrastructure.

Personally, I believe this movement is also connected to the pressure of ESG (Environmental, Social, and Governance) management. To achieve carbon neutrality goals, big tech companies need to transition the power used in data center operations to renewable energy, and Texas is one of the best-suited regions for this. In fact, Google has pledged to achieve carbon neutrality by 2030, and this investment in Texas can be seen as part of that commitment.

Geopolitical Considerations and the Trump Effect

The content mentioned towards the end of the article is really important. It analyzes that such investments in U.S. data centers are “not unrelated to the pressure from President Donald Trump.” In a situation where the Trump administration is strongly demanding the revival of domestic manufacturing and the expansion of domestic investments by companies, big tech companies seem to be adjusting their strategies to reduce overseas investments and increase domestic investments.

Especially as the technological hegemony competition with China intensifies, building key AI infrastructure within the U.S. has become important from a national security perspective. Since 2024, the U.S. government has been strengthening AI chip export controls to China and limiting cooperation with Chinese companies, prompting U.S. big tech companies to feel the need to establish a complete AI ecosystem domestically.

There are several reasons why Texas is in a favorable position for these strategic considerations. Firstly, geographically located in the south-central U.S., it has good connectivity with data centers on the east and west coasts, and it is relatively free from natural disaster risks. It is less affected by wildfires in California or hurricanes in Florida. Additionally, Texas is traditionally known for its pro-business policies, resulting in less regulatory burden compared to other states.

Governor Abbott’s statement that “Texas has become the state that has received the most investment from Google in the U.S. with this $40 billion investment” is also impressive. It shows how actively the Texas state government is working to attract big tech. In fact, Texas has no corporate income tax and no personal income tax, making it favorable for attracting companies and talent.

But is this concentration of investment sustainable? Personally, I have some concerns. First, as power demand surges, the burden on Texas’s power grid could increase. Texas, which experienced a massive blackout in the winter of 2021, still faces challenges in ensuring the stability of its power infrastructure. Additionally, concentrating data centers in one area could increase geopolitical risks.

Nonetheless, in the short term, this concentration of investment is likely to continue. With Google’s $40 billion investment planned to proceed until 2027, Texas is likely to become a key hub for U.S. AI infrastructure over the next 2-3 years. As CEO Pichai mentioned, “creating thousands of jobs and providing training opportunities for college students and apprentice technicians,” it is expected to have a significant impact on the local economy.

How should we view this from Korea’s perspective? Although Korea is also striving to attract AI data centers, it is challenging to compete with Texas in terms of power costs and land acquisition. Instead, Korea should aim to differentiate itself by acting as a hub for the Asia-Pacific region, leveraging connectivity with 5G/6G networks, and creating synergies with semiconductor companies like Samsung and SK Hynix. While there are examples like Naver’s GAK data center in Chuncheon and Kakao’s Ansan data center, the scale is still significantly different from the mega data centers in the U.S.

Ultimately, Google’s $58 billion investment in Texas signals the intensification of infrastructure competition in the AI era. The importance of data centers is growing beyond just spaces to store and process data, becoming key infrastructure for training and servicing AI models, and competition between countries and regions over this is becoming fierce. It will be fascinating to see how this investment competition unfolds over the next few years.

This article was written after reading a Yonhap News article, with personal opinions and analysis added.

Disclaimer: This blog is not a news outlet, and the content is the author’s personal opinion. Responsibility for investment decisions lies with the investor, and the author assumes no responsibility for investment losses based on the content of this article.