This article first appeared on GuruFocus.
Alphabet Inc. (NASDAQ:GOOG) has agreed to acquire clean energy developer Intersect Power LLC for $4.75 billion in cash plus existing debt, a deal that could expand Google’s access to electricity as it scales data centers tied to artificial intelligence. The acquisition, announced Monday, follows Google’s minority investment in Intersect last year and comes as US power grids face rising strain from renewed demand growth. Alphabet said the transaction is intended to give Google greater flexibility to develop new power generation alongside expanding data center capacity, which has increasingly become a limiting factor for AI deployment.
The deal arrives as the AI buildout drives consolidation across data centers and energy infrastructure. Google, along with Amazon.com Inc. (NASDAQ:AMZN) and Microsoft Corp. (NASDAQ:MSFT), has been managing the tension between rising electricity needs and long-term climate goals, after the company disclosed in 2024 that its carbon emissions increased 48% over the past five years due largely to data center operations. Intersect, backed by private equity firm TPG Inc., has focused on solar and battery storage projects designed to power large-scale data centers, particularly in Texas, a region its CEO Sheldon Kimber has described as attractive due to abundant wind and solar resources. The company has about 7.5 gigawatts of solar and storage in operation and another eight gigawatts in development, with much of that capacity tied to data-center-heavy markets.
As part of the transaction, Alphabet will acquire Intersect’s power development platform, team, and in-development assets already contracted by Google, while Intersect will retain its brand and continue under Kimber’s leadership. Grid assets contracted to other customers in Texas and California will remain outside the purchase, with TPG Rise Climate retaining a stake in those projects. Industry analysts have suggested the structure could reduce regulatory risk for Google, as owning power generation assets may provide more flexibility in how and where new data centers are built, rather than relying solely on third-party power arrangements as AI infrastructure continues to scale.
