As the Biden administration readies tax increases on Corporate America and, with regulatory action on the horizon, Big Tech is trumpeting its value to the US economy. Apple, notably, and Intel have been re-iterating their US investments and how much that generates for local economies.
Apple has outlined plans to increase its investments in several US states, including California, Colorado, Massachusetts, Texas, Washington, and Iowa. New data centers are high on Apple’s investment agenda.
Big Tech firms face tax increases
Apple is the largest taxpayer in the US, with its activities throughout the country supporting over 2.7 million jobs. Its tax burden will increase after US President Joe Biden raises corporate taxes to pay for public investments. The US corporate tax rate could jump from 21% to 28%.
A proposal seeks tax increases levied for profits held overseas, clamping down on the practice of putting income-generating assets in lower-tax offshore countries. Such a proposal would undoubtedly impact Big Tech.
Apple’s reiteration of its value to local economies is a hint that it may not be able to continue making these types of investments if its profits are squeezed. Apple has also emphasized that the iOS app economy it has developed and grown provides work for millions of developers.
This week, the company said that it would raise its US investment commitments by 20% to $430bn over the next five years.
North Carolina will be a beneficiary of Apple’s largesse
Apple’s goal is to develop next-generation silicon operations and drive 5G investment across nine US states. It will create 20,000 new jobs in the US, including building a new campus and engineering hub in North Carolina. Its investment in the Raleigh Triangle region is expected to create 3,000 jobs in artificial intelligence and software engineering. Apple also plans to increase its engineering operations in Boulder, Colorado and employees should start moving into another $1bn campus in Austin, Texas next year.
The North Carolina area is a magnet for data center and campus investment in the US. However, the largest local data center market is in Ashburn, Virginia, which has been dubbed ‘Data Center Alley.’ Measured in megawatts (MW) of power capacity, Northern Virginia has almost as much data center inventory as the second, third, fourth, and fifth largest markets (Dallas-Fort Worth, Silicon Valley, Chicago, and Phoenix) combined.
Renewables power data center investment
Big Tech has been investing across the US in large hyperscale data centers, particularly in more remote states with access to renewable energy. Apple added 350MW of renewable energy supply in 2020 through a $4.7bn Green Bond program and invested in a battery storage project to power most of its operations in California.
However, one of Apple’s landmark data center investments in Waukee, Iowa, is making glacially slow progress. The company first announced the 400,000 square foot facility in 2017, saying it would be online in 2020. But construction work has yet to begin, and the completion date has been pushed back to later in the decade.
Big Tech continues to make local investments across the US. For example, Intel announced in March that it planned to spend $20bn to build two new factories in Arizona, which could create 15,000 local jobs.
With the US wanting to build more home-based semiconductor factories, the Biden administration will likely seek to balance its tax-raising plans by providing future subsidies to spur semiconductor development.