In a major move to secure the future of its artificial intelligence ambitions, Alphabet Inc., the parent company of Google, has announced a definitive agreement to acquire energy and data centre infrastructure provider Intersect. The deal, valued at $4.75 billion in cash, is a direct response to the growing power demands of AI technologies.
The Power Bottleneck for AI Growth
The company stated that securing reliable and substantial power supply has become the primary bottleneck in the development of generative AI and the expansion of computing capacity. This acquisition is a strategic step to remove that obstacle. By taking control of Intersect's extensive pipeline of projects, which includes multiple gigawatts of energy and data centre developments currently under construction, Alphabet aims to ensure its AI infrastructure has the necessary fuel to grow.
"The acquisition will enable more data center and generation capacity to come online, faster, while accelerating energy development and innovation," Alphabet said in an official statement.
Strategic Details of the Intersect Deal
As part of the agreement, Intersect will operate as a separate brand under Alphabet to maintain operational continuity. A key part of its mandate will be to explore emerging technologies to diversify energy supply, specifically to support Google's massive data centre investments across the United States. Notably, Intersect's existing operating assets in Texas and its California-based projects are excluded from this acquisition.
Google and Alphabet CEO Sundar Pichai emphasised the strategic importance of the deal. "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," Pichai said. He added that the company looks forward to welcoming Sheldon and the entire Intersect team.
Part of a Broader Global Energy Strategy
The Intersect acquisition is not an isolated event but a crucial piece of Google's broader strategy to power its energy-intensive AI operations globally. This strategy includes long-term power purchase agreements with major energy firms.
Previously, French energy giant TotalEnergies confirmed a 21-year power supply agreement with Google to support its data centres in Malaysia. Furthermore, in November, TotalEnergies also agreed to supply power for Google's high-capacity data centres located in Ohio, USA.
These concerted efforts highlight the critical and often overlooked challenge of the AI revolution: the immense physical infrastructure and electricity required to run it. Alphabet's $4.75 billion investment in Intersect signals a clear recognition that the future of AI is inextricably linked to the future of energy.
