For the second consecutive quarter, Google spent more than $1 billion on data centers and servers in the first quarter of 2013, reflecting a new level of investment in its Internet infrastructure. The company pumped $1.2 billion into its server farms in the first three months of 2013, its highest quarterly investment ever in Internet infrastructure, topping the $1.02 billion from the fourth quarter of 2012.
The only time the company has spent more on capital expenditures was the fourth quarter of 2010, when it spent $2 billion purchase 111 8th Avenue, primarily for its office space.
The intensive first quarter capital spending, announced in Friday’s earnings report, is driven by the company’s global build-out of its Internet infrastructure. Google’s data center construction will likely continue at high levels in coming quarters, as since November the company has announced a $200 million expansion in Council Bluffs, Iowa, a $600 million expansion at its campus in Berkeley County, South Carolina and another $600 million to expand its campus facilities in Lenoir, North Carolina, and $390 million to add capacity to its facility in Belgium. Google is also expanding its infrastructure in South America and Asia.
Here’s a look at Google’s quarter-by-quarter spending on capital expenditures.
A capital expenditure is an investment in a long-term asset, typically physical assets such as buildings or machinery. Google says the majority of its capital investments are for IT infrastructure, including data enters, servers, and networking equipment. In the past the company’s CapEx spending has closely tracked its data center construction projects, each of which requires between $200 million and $600 million in investment.