Alphabet to buy Intersect Power to bypass energy grid bottlenecks

Google parent company Alphabet has agreed to acquire Intersect Power, a data center and clean energy developer $4.75 billion in cash plus the assumption of the company’s debts.

The acquisition, announced Monday, will help Alphabet expand its power generation capacity alongside new data centers without having to rely on local utilities that are struggling to meet demand from AI companies. Securing access to energy that powers data centers has become a critical part of training AI models.

Alphabet previously had a minority stake in Intersect Power after Google and TPG Rise Climate led one $800 million strategic financing round in the company last December. That partnership set a target of a total investment of $20 billion by 2030.

The acquisition includes Intersect’s future development projects, but excludes its existing operations, which will be purchased by other investors and managed as a separate company.

Intersect’s new data farms, which are essentially sites alongside wind, solar and battery power, are expected to be operational by the end of next year and fully completed in 2027. Google said when it announced its minority investment.

The transaction is expected to close in the first half of next year.

Google becomes the primary user. However, Intersect’s campuses are designed as industrial parks that can host AI chips from other companies in addition to Google’s.