Google is making its biggest investment ever in Australia - CNN

Hong Kong (CNN Business)Google is making its largest-ever investment in Australia, after a clash with the government that saw the tech giant threaten to shut down search there earlier this year.

CEO Sundar Pichai announced Monday that the company would devote 1 billion Australian dollars (about $736 million) to the country over the next five years.

The funds will go, in part, toward launching the firm's first research hub in Australia, as well as helping develop the nation's cloud computing sector.

Google (GOOGL) also plans to team up with an Australian government agency on scientific research, which will include projects on clean energy and protection of the Great Barrier Reef. Additionally, the firm will partner with a local university on quantum computing.

Google, which has been in Australia for two decades and now employs nearly 2,000 people locally, said that the new initiative is expected to help create new jobs and spur innovation.

Australian Prime Minister Scott Morrison praised the move Tuesday, calling it "a $1 billion vote of confidence" in Australia's economic strategy. Morrison's government has previously outlined plans to turn Australia into "a top digital economy by 2030," working to bolster its capabilities in artificial intelligence, among other areas.

Speaking at a Google office in Sydney on Tuesday, Morrison emphasized that the plan "doesn't mean we're trying to be the next Silicon Valley."

But he said that the company's program would help create more than 6,000 jobs and add about 6.7 billion Australian dollars ($4.9 billion) of value to the economy.

"Our challenge, as we emerge from this pandemic in a very challenging world, is to secure Australia's economic recovery," Morrison added. "That is the challenge we face as we move into 2022, and Australia's digital strategy is central to securing that recovery."

Turning the page

Google's bet on Australia appears to somewhat reset the complicated relationship it's had with the country's users and government in recent months.

The company has in the past publicly tussled with regulators over legislation that requires both Google and Facebook (FB) to pay publishers for news content.

For months, Google vehemently argued against the proposed law. At one point last year, it even used its homepage to warn Australians that the proposed law would harm their ability to search and lead to "consequences" for YouTube users. Regulators at the time accused the company of spreading "misinformation."

Tensions came to a head in January, when the company threatened to pull its search engine in the country if the law moved forward.

But as a vote on the bill approached, Google took a different tack. It tried to get ahead of the legislation by announcing partnerships with some of the country's largest newsrooms, including Rupert Murdoch's News Corp (NWS) and Seven West Media.

Meanwhile, the spotlight largely turned to Facebook, which abruptly banned news content in Australia in February over the proposed law.

Facebook later restored access to those pages after Australia made some changes to the code.

The law was ultimately passed in February, with Google's strategy cheered by media organizations and politicians alike.

Morrison addressed some of the company's past issues on Tuesday, saying "the fact that Google has decided to invest in the way that they have ... seals [our] partnership."

"We have already worked together with the tech sector on so many fronts, and there are so many more that we need to work on," he said.

— Hilary Whiteman contributed to this report.

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