FILE PHOTO: The Google logo is seen outside the company's offices in London, Britain, June 24, 2025. REUTERS/Carlos Jasso/File Photo

(Reuters) -Alphabet's Google said on Friday it would invest $40 billion in three new data centers in Texas, as part of its push to expand capacity for artificial intelligence initiatives.

The investment, which will be made through 2027, underscores the intensifying competition among AI and cloud service providers to build infrastructure capable of supporting advanced AI models.

OpenAI, Microsoft, Meta Platforms and Amazon are among companies spending billions in new AI-focused data centers.

Google said one of the new data centers will be in Armstrong County, in the Texas Panhandle, and the other two in Haskell County, a stretch of West Texas near Abilene.

"This investment will create thousands of jobs, provide skills training to college students and electrical apprentices, and accelerate energy affordability initiatives throughout Texas," Alphabet CEO Sundar Pichai said in a statement.

The company will also invest in its existing Midlothian campus and Dallas cloud region, part of its global network of 42 cloud regions.

"Google's $40 billion investment makes Texas Google's largest investment in any state in the country and supports energy efficiency and workforce development in our state," Texas Governor Greg Abbott said in the same statement.

Tech companies have announced massive spending plans this year, with many focusing on expanding their U.S. footprint, as President Donald Trump pushes for investments to maintain the country's edge in the AI sector.

Earlier this week, Anthropic said it would invest $50 billion in data centers across the U.S., including New York and Texas.

Google on Tuesday announced it would invest 5.5 billion euros ($6.41 billion) in Germany in the coming years in a push to expand its infrastructure and data center capacity in Europe's largest economy.

The latest AI investment surge echoes past tech bubbles, with valuations and spending outpacing near-term returns, some analysts and investors have warned. They say demand projections may prove overly optimistic if AI adoption does not grow at a similar pace as capital expenditure.

($1 = 0.8575 euros)

(Reporting by Juby Babu in Mexico City; Editing by Shilpi Majumdar)