Alphabet, Google’s parent company, announced it will acquire Intersect Power — a data center and clean energy developer — for $4.75 billion in cash, along with the assumption of the company’s debt. The acquisition, announced Monday, is intended to help Alphabet expand its power-generation capacity alongside new data centers, reducing its reliance on local utilities that are increasingly strained by rising demand from AI companies.

By owning both data center infrastructure and energy generation, Alphabet can scale AI operations more predictably as AI model training continues to drive unprecedented electricity demand.

Access to reliable power has become a strategic priority as AI systems grow larger and more energy-intensive.

Alphabet was already a minority investor in Intersect Power following an $800 million strategic funding round last December, led by Google and TPG Rise Climate. That partnership set a goal of $20 billion in total investment by 2030.

The acquisition includes Intersect’s future development projects, while its existing operating assets will be purchased by other investors and managed as a separate company.

Intersect’s model centers on large-scale “data parks” — industrial campuses built directly next to wind, solar, and battery storage to supply power to nearby AI data centers. These facilities are designed to support energy-intensive AI workloads without relying on traditional grid infrastructure.

The campuses are expected to begin operations late next year and be fully completed by 2027. The transaction itself is expected to close in the first half of next year, aligning Alphabet’s ownership timeline with the rollout of these new energy-connected data center sites.

While Google will be the primary user, the campuses are designed to host other companies’ AI chips alongside Google’s, allowing multiple organizations to operate within the same energy-secured environment.

Q: Why is energy access so critical for AI companies?
A: Training and running large AI models requires massive and continuous power. Grid constraints can delay or limit AI deployment at scale.

Q: Will Intersect Power remain an independent company?
A: Its future development projects will be acquired by Alphabet, while its existing operations will be spun out and managed separately.

Q: Will Alphabet’s acquisition limit Intersect Power’s campuses to Google-only use?
A: No. While Google will be the primary user, Intersect’s data parks are designed as industrial campuses that can host other companies’ AI chips alongside Google’s infrastructure.

Alphabet’s move underscores a growing reality in AI: energy is no longer a background utility — it’s core infrastructure.

As AI systems scale, companies that control both compute and power generation gain a competitive advantage. This deal reflects how AI leaders are reshaping not just software and chips, but the physical foundations that make AI possible — from data centers to energy grids.

The next phase of AI competition may be decided as much by who controls electricity as by who builds the best models.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.