Alphabet announced Monday that it will acquire Intersect, a data‑center and energy infrastructure company, for $4.75 billion in cash plus the assumption of debt — a move aimed squarely at solving one of the thorniest problems of the AI era: power.
The price tag is striking but not surprising. As generative AI services proliferate, the electricity needed to run huge clusters of processors has become a strategic constraint. Alphabet already owned a minority stake in Intersect from a funding round last year; this purchase converts that bet into full ownership while, at least on paper, letting Intersect continue to operate independently.
Why Alphabet is buying an energy specialist
AI workloads are hungry. Training and serving large models requires sprawling data‑center campuses and, crucially, access to reliable, often low‑cost power. Intersect’s niche is pairing data center demand with generation and transmission solutions — building the pipelines between generators and server rooms so capacity can come online in tandem with compute.
“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,” Google and Alphabet CEO Sundar Pichai said in the company statement announcing the deal.
That strategy ties into broader moves across Alphabet’s business: as Google layers more AI into products such as Workspace and Search, the company has been beefing up both compute and the tools that make it sustainable. Alphabet’s push for more tailored energy solutions also sits alongside other AI initiatives inside Google; for instance, recent work to let Gemini deep‑search across Gmail and Drive shows how the company is folding larger AI capabilities into everyday products — capabilities that ultimately increase backend demand for servers and power (Gemini’s Deep Research may soon search your Gmail and Drive).
The mechanics: what’s included — and what’s not
Alphabet said the deal values Intersect at $4.75 billion and anticipates closing in the first half of 2026, subject to customary conditions. Intersect had earlier raised roughly $2.1 billion from investors including TPG Rise Climate, and Google participated in that round.
Not every Intersect asset is changing hands. Alphabet confirmed that certain operating and in‑development assets in California, along with existing operating Texas assets, will remain with Intersect’s other backers (TPG Rise Climate, Climate Adaptive Infrastructure and Greenbelt Capital Partners) and continue to operate independently. For the pieces Alphabet is buying, the plan is to have Intersect work closely with Google’s technical infrastructure team; one such collaboration is already underway on a co‑located power site and data center in Haskell County, Texas.
Alphabet’s broader Texas commitment — previously touted as a $40 billion investment through 2027 that includes campuses in Haskell and Armstrong counties — helps explain why access to generation and transmission is now a corporate priority.
Communities, costs and the politics of more compute
The move won’t be viewed purely as a technical or commercial fix. Across the U.S., communities near new data centers have raised alarms about rising electricity bills and the burden of hosting massive compute facilities. Local officials and residents often interpret higher rates as the immediate cost of powering remote but energy‑hungry AI “factories.” That backlash has pushed companies to find cleaner, more localized generation and to structure deals so they’re less likely to strain regional grids.
Intersect’s pitch — increasing and diversifying supply while keeping a lid on costs — directly addresses that political and public‑policy friction. But turning projects from proposals into wired, live generation takes time, permitting and coordination with utilities and regulators.
Bigger picture: competition for infrastructure
Alphabet isn’t the only player racing to lock down energy and capacity. OpenAI and other AI cloud customers have signaled massive infrastructure commitments, and the industry is building out not just chips and servers but the power plants, substations and transmission lines that sustain them. The acquisition gives Alphabet more control over a portion of that critical supply chain.
It also hints at how AI is reshaping corporate strategy: securing raw compute is no longer just a matter of buying chips or leasing racks — it increasingly looks like energy project development. Alphabet’s Intersect deal complements internal efforts and external bets, and it follows speculative projects like Google’s Project Suncatcher that imagine different ways to site and power future AI data centers (Project Suncatcher explored novel approaches to AI data‑center siting).
Expect regulators and utilities to watch the deal closely. Alphabet says Intersect will remain operationally independent, but combined resources and tighter alignment with Google’s data‑center road map could accelerate projects that, until now, progressed unevenly.
This isn’t an overnight fix. Bringing generation and transmission online, navigating local politics, and aligning long‑term power contracts all take years. What the Intersect purchase does, immediately, is buy Alphabet time and optionality: more levers to pull as it scales the infrastructure underpinning the next wave of AI products and services.