Alphabet buys Intersect Power to bypass energy grid bottlenecks

Google parent Alphabet has agreed to buy Intersect Power, a data center and clean energy developer, to $4.75 billion in cashplus the assumption of the company’s debt.

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

Alphabet previously held a minority stake in Intersect Power after Google and TPG Rise Climate conducted a 800 million dollars strategic round in the company last December. This partnership sets a total investment target of $20 billion by 2030.

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

Intersect’s new data parks, which are essentially locations near wind, solar and battery power, are expected to be operational late next year and fully completed by 2027. Google said when it announced its minority investment.

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

Google will be the main user. However, Intersect’s campuses are designed as industrial parks that can house other companies’ AI chips alongside Google’s.