Dive Brief:

• Google will spend more than $25 billion to build out data center and AI infrastructure across the Pennsylvania-based PJM Interconnection power grid in the next two years, the company said Tuesday at the inaugural Pennsylvanian Energy and Innovation Summit hosted by Senator Dave McCormick and attended by President Donald Trump.
• In addition to expanding its cloud footprint in a region that stretches contiguously across 13 states, including Illinois, New Jersey, Ohio and Virginia, the hyperscaler committed more than $3 billion to modernizing two hydropower plants located in Pennsylvania and launched an AI skills training initiative called AI Works for America.
• “Google’s investments announced today will increase energy abundance and empower Americans with the skills needed to thrive in the AI era,” Ruth Porat, president and chief investment officer of Google parent company Alphabet, said. “We support President Trump’s clear and urgent direction that our nation invest in AI infrastructure, technology and the energy to unlock its benefits so that America can continue to lead in AI.”

Dive Insight:

As enterprises search for a return on investments in generative AI technologies, the major cloud providers are in a race to build AI data center capacity that’s chewing through tens of billions of dollars every couple of months.

Google plans to boost its capital investments by more than 40% year over year to $75 billion in 2025, CEO Sundar Pichai said in February, pointing to compute capacity constraints and growing demand for its cloud and AI services. In April, the company made a $3 billion commitment to facility buildouts in Virginia and Indiana, vowing to ramp up capacity “to support customer needs and customer demands,” CFO Anat Ashkenazi said during an earnings call.

Google’s investments are feeding a spending spree that’s expected to drive global spending on data centers to just under $600 billion this year, according to Dell’Oro Group. AWS and Microsoft pledged $100 billion and $80 billion, respectively, to capital investments earlier this year.

Pennsylvania’s power hub attracted $20 billion in AWS infrastructure investments last month, spurred in part by a federally endorsed AI infrastructure push called Stargate. Blackstone added to the funding blitz Tuesday, investing over $25 billion to build out the state’s digital and energy infrastructure. The firm aims to catalyze an additional $60 billion in investments, according to the announcement.

“What makes us so excited about this area is the idea that you can colocate the data centers directly next to the source of power,” Blackstone President and COO Jon Gray said Tuesday at the summit. “That’s really the special sauce here … because building transmission lines, building pipelines, that's really difficult.”

Last year, in an effort to bring more power into the grid, Microsoft partnered with Constellation Energy to initiate plans to restart a nuclear generation station at Pennsylvania’s Three Mile Island facility. On Tuesday, Google inked an alliance with Westinghouse Electric Company to develop modular nuclear reactors using AI to power AI, the two companies said in an announcement.