Technical
Dec 23, 2025
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Artificial Intelligence
Alphabet Acquires Intersect for $4.75B to Power AI Data Centers
NewDecoded
4 min read
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Major Infrastructure Play
Alphabet announced Monday it will acquire Intersect, a data center and energy infrastructure company, for $4.75 billion in cash plus assumed debt. The deal brings multiple gigawatts of energy and data center projects currently in development under Alphabet's control, accelerating the company's capacity to support AI workloads and cloud services. Google already held a minority stake in Intersect from a December 2024 funding round that aimed to catalyze $20 billion in renewable power infrastructure.
The transaction positions Alphabet to address what has become a critical constraint for tech companies: reliable, affordable power for energy-intensive AI operations. Intersect specializes in co-locating data centers directly with power generation facilities, including solar, wind, battery storage, and natural gas plants. This model bypasses traditional grid interconnection delays that have stalled many data center projects across the United States.
Intersect will continue operating as a separate brand under founder and CEO Sheldon Kimber while partnering closely with Google's technical infrastructure team. Projects include a co-located data center and power site under construction in Haskell County, Texas, part of Google's previously announced $40 billion investment in the state through 2027. By 2028, Intersect projects representing about 10.8 gigawatts of power are expected to be online or in development, roughly 20 times the Hoover Dam's output.
Strategic Exclusions
Notably, Intersect's existing operating assets in Texas and its California projects will not transfer to Alphabet. These assets will remain independent, supported by investors TPG Rise Climate, Climate Adaptive Infrastructure, and Greenbelt Capital Partners. The split suggests Alphabet is primarily interested in projects specifically designed for Google's infrastructure needs rather than broader energy market operations. "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," said Sundar Pichai, CEO of Google and Alphabet. Intersect's Sheldon Kimber emphasized that "modern infrastructure is the linchpin of American competitiveness in AI."
Emerging Technologies Focus
Beyond immediate capacity needs, Alphabet plans to use Intersect to advance emerging energy technologies including advanced geothermal systems, long duration energy storage, and natural gas with carbon capture. The company is also deploying AI tools to accelerate grid connection processes for new power plants and support energy efficiency programs in communities hosting data centers. The deal, subject to customary regulatory approvals, is expected to close in the first half of 2026.
This acquisition reflects a fundamental shift in how Big Tech approaches infrastructure. Tech giants are aggressively hunting for power to serve energy hungry data centers that train AI models and handle queries, and buying entire energy companies is now considered strategic rather than peripheral. Alphabet is essentially vertically integrating its power supply, sidestepping grid constraints and utility dependencies that have become bottlenecks. The move comes as more than $61 billion has flowed into the data center market this year and rivals like OpenAI commit over $1.4 trillion to infrastructure buildouts. By controlling both generation and consumption, Alphabet secures competitive advantage in the AI arms race while potentially reshaping energy markets. The co-location model could become the template for future data center development, fundamentally altering how we think about industrial power consumption and grid architecture.
