Google's parent company deepens its bet on energy infrastructure to power data centers amid fierce competition with OpenAI.
Alphabet Inc. announced Monday it has agreed to acquire Intersect Power LLC, a clean energy and data center infrastructure developer, for $4.75 billion in cash plus the assumption of debt—marking one of the largest deals by the tech giant to dramatically expand its data center footprint for AI.
The acquisition underscores the escalating battle among tech giants to secure the enormous electricity supplies needed to train and run artificial intelligence systems, as U.S. power grids struggle to keep pace with the soaring electricity demand of generative AI.
Included in the transaction are Intersect's world-class team and multiple gigawatts of energy and data center projects in development or under construction from the companies' existing partnership. Google already held a minority stake in the San Francisco-based company following an $800 million strategic funding round last December.
"Intersect will help us expand capacity, operate more nimbly in building new power generation in lockstep with new data center load, and reimagine energy solutions to drive US innovation and leadership," said Sundar Pichai, CEO of Google and Alphabet, in a statement released by the company.
Sheldon Kimber, founder and CEO of Intersect, emphasized the strategic importance of the deal. "Modern infrastructure is the linchpin of American competitiveness in AI. We share Google's conviction that energy innovation and community investment are the pillars of what must come next," he said.
The Power-Hungry AI Arms Race
The deal comes as technology companies pour unprecedented sums into data center infrastructure. OpenAI has committed to spend about $1.4 trillion on infrastructure so far, equating to roughly 30 gigawatts of data center capacity, according to CEO Sam Altman. McKinsey research projects that by 2030, data centers worldwide will require $6.7 trillion to keep pace with demand for compute power.
The acquisition will help Alphabet expand its power-generation capacity alongside new data centers without having to rely on local utilities that are struggling to keep up with the demand of AI companies.
What Alphabet Gets
Founded in 2016, Intersect develops solar and wind power installations with on-site battery arrays that ensure a steady energy supply regardless of weather conditions. The company has $15 billion of assets either operating or under construction, and by 2028, Intersect projects representing about 10.8 gigawatts of power are expected to be online or in development—more than 20 times the electricity produced by the Hoover Dam.
The transaction includes joint projects in Haskell County, Texas, where a co-located data center and power facility is under construction. However, Intersect's existing assets in Texas and existing and in-development projects in California will not be part of the acquisition and will continue operating as a separate company supported by investors TPG Rise Climate, Climate Adaptive Infrastructure, and Greenbelt Capital Partners.
A 'Power-First' Approach
Intersect's model involves co-locating data centers with renewable power generation, allowing a one-gigawatt data center paired with equivalent wind, solar, and battery storage to meet up to 80% of its annual power needs from carbon-free energy.
There's growing interest among regulators, tech companies, and power providers in co-locating big data centers and new power sources. Kimber has argued that this approach represents the fastest, cheapest, and most reliable way to bring new energy online while reducing strain on existing grids.
The partnership between Google, Intersect, and TPG, announced last December, set a target of catalyzing $20 billion in renewables infrastructure investment by the end of the decade.
Intersect's operations will remain separate from Alphabet under the Intersect brand and will continue to be led by Sheldon Kimber. The company will partner closely with Google's technical infrastructure team on both existing and new projects.
The acquisition is expected to close in the first half of 2026 but remains subject to regulatory approvals and customary closing conditions.
For Alphabet, the deal represents another significant bet that securing energy supplies will prove as crucial to winning the AI race as developing the technology itself.
