Google slows data center empire expansion

'Volatile economic conditions'


Citing "volatile economic conditions," Google has backed out of a $4.7 million grant that would have greased the expansion of its worldwide data center empire into the sleepy town of Lenoir, North Carolina.

In a letter to the North Carolina Commerce Secretary, The Triangle Business Journal reports, a Google lawyer said those aforementioned volatile conditions made it difficult to predict when its Lenoir data center might be completed.

"[Google's] 'ramp-up' forecasts for its Lenoir project always have been sensitive to a variety of factors that are difficult to accurately predict," the letter read. "Recent volatile economic conditions make business planning even more difficult."

Google was awarded a North Carolina Job Development Investment Grant (JDIG) last year, but it hadn't actually signed on the contract's dotted line. Through the grant, the company would have received $4.7m for creating 210 jobs and spending $600m over four years. But yesterday, Google pulled its application.

"After closely consulting with the [North Carolina] Department of Commerce, we have determined that we do not intend to enter the JDIG program," a Google spokesman told us. "While we fully expect to achieve employment and capital investment levels that are consistent with those that the state announced back in 2007, considering state budgetary constraints as well as the difficulty in forecasting our business climate, we do not believe that JDIGs would be a wise investment for both Google and North Carolina at this time."

But there are still all sorts of other NC tax breaks and incentives on the table - according to The Business Journal, these could total $250m - and Google says it will continue to built out a Lenoir data center filled with bespoke gear. "We have and will continue to utilize the other components of the economic incentives package, which was a critical factor in our selection of North Carolina and Caldwell County," the spokesman continued.

"This decision does not, in any way, impact the operation of our data center in Lenoir, our commitments to the Caldwell County community, or the jobs of those who are currently employed at the data center."

As it stands, Google has built one data center building where it employs 50 people. But officials in Lenoir's Caldwell County say that Google has informed engineers and laborers that work on the site has been halted and will not be resumed for "a while."

Google told the state that it still plans to create those 210 jobs and spend that $600m. But things won't progress as quickly as expected. And this isn't the only place Google is slowing the expansion of its Project Will Power-juiced data center empire. In October, Google said it would delay the opening of a new data center in Oklahoma by a year.

As Google said on its latest earning call, most of its capital expenditures are "related to IT infrastructure including data center construction, production of servers and networking equipment." Google doesn't just build its own data centers. It builds its own servers and its own Ethernet switches. ®

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