The AI power scramble intensifies with Alphabet's purchase of data-center partner Intersect

By Christine Ji

With energy becoming a critical AI bottleneck, Google's $4.75 billion acquisition of Intersect is a move to secure power for its data centers

Google and Intersect are currently building a co-located site in Texas where the data center and power plant share the same campus.

As demand for artificial-intelligence compute continues to outpace the ability for data centers and power suppliers to catch up, Alphabet has made an aggressive move to expand its energy resources.

On Monday, Alphabet (GOOGL) (GOOG) announced the acquisition of the renewable-energy developer Intersect Power for $4.75 billion in cash plus the assumption of its debt.

"The acquisition will enable more data center and generation capacity to come online, faster, while accelerating energy development and innovation," Alphabet said in a press release.

Alphabet took a minority stake in Intersect last year when it lead a $800 million funding round along with alternative asset manager TPG's climate investing arm. Google is acquiring Intersect's workforce and gigawatts of active joint projects, while tasking the company with developing new technologies to expand the energy supply for U.S. data centers.

Google and Intersect are currently constructing a co-located site - meaning that the data center and power plant are on the same campus - in Haskell County, Texas.

Intersect's operations will remain separate from the rest of Google and be led by its current founder and Chief Executive Sheldon Kimber. Intersect's active operations in Texas and California, including development projects based in California, are not included in the transaction, which is expected to close in the first half of 2026.

While BNP Paribas analyst Nick Jones wrote in a Monday note that the acquisition will not have a near-term impact on Alphabet's financials, he believes "it helps strengthen Alphabet's long-term AI infrastructure positioning by improving control over energy sourcing and capacity expansion."

"Overall, we view the deal as a prudent investment to support further AI and cloud growth from here," Jones added.

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Energy has emerged as a bottleneck for the development of AI, as the technology has pushed the limits of a U.S. energy grid that has experienced practically stagnant demand for the two decades prior to 2020. With the Trump administration emphasizing AI as a key national security focus, expanding access to energy has become a critical priority as well.

"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," Intersect's Kimber said in the press release.

This isn't Google's first foray into energy infrastructure. In August, Google took part in a $3.7 billion deal with TeraWulf (WULF), a crypto miner turned high-performance computing provider, and the AI cloud platform Fluidstack. Google initially backstopped $1.8 billion of Fluidstack's lease payments to TeraWulf, later increasing the amount to $3.2 billion.

Google's involvement reduced the development risk for TeraWulf and helping the former bitcoin miner secure a $3.2 billion debt financing package in October.

Read: Google's unlikely new ally in the AI race is a bitcoin miner

Google, along with Nvidia (NVDA), has also backed nuclear-fusion startup Commonwealth Fusion Systems to explore alternative energy resources.

Google has emerged as an AI superpower this year by expanding its footprint in every step of the ecosystem, from data center infrastructure to its leading large language model Gemini.

Shares of Alphabet have risen 63.2% in 2025, to make it the best performer this year among the so-called "Magnificent Seven" technology giants.

-Christine Ji

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12-22-25 1335ET