Alphabet Buys Intersect to Power AI Data Centers With Clean Energy

Alphabet deepens its power push as AI load rises

Alphabet buys Intersect to power AI data centers with clean energy in a deal that underscores how quickly electricity supply has become a strategic constraint for the technology sector. The agreement, announced Monday, December 22, 2025, values the transaction at $4.75 billion in cash plus the assumption of debt, and it comes as developers, utilities, and regulators confront a surge in demand tied to large-scale computing.

The move matters because it shifts a major buyer of computing infrastructure deeper into the upstream layer of energy development, where projects can take years to permit, finance, and build. For Alphabet, securing power is increasingly as critical as securing chips, since the pace of data center expansion is now bounded by interconnection queues, generation availability, and local transmission constraints.

Deal terms and what Alphabet is buying

Under the agreement, Alphabet will acquire Intersect’s portfolio of energy and data center projects that are in development or under construction. The structure is designed to accelerate the timeline for bringing capacity online, particularly in regions where new generation and storage can be paired with large data center campuses.

Intersect has about $15 billion of assets either operating or under construction. Looking forward, projects representing about 10.8 gigawatts by 2028 are expected to be online or in development, a scale that highlights how energy developers are now building pipelines comparable to traditional utility buildouts. The 10.8 gigawatts by 2028 figure is central to the strategic logic: it implies a multi-year runway of generation and related infrastructure that can be matched to growing computing demand.

What stays outside the acquisition

Not all of Intersect’s footprint is included. Existing operating assets in Texas, as well as operating and in-development assets in California, are expected to remain outside the transaction and continue as an independent company supported by current investors. That carve-out approach limits operational disruption while allowing the acquired development pipeline to align closely with Alphabet’s near-term infrastructure needs.

One Texas initiative often cited in connection with Alphabet’s data center buildout is a large energy storage system being developed alongside a Google data center campus. Keeping certain operating assets separate may also help preserve existing financing arrangements and contractual structures that can be difficult to rewrite midstream.

Why Big Tech is chasing power, not just servers

The deal lands in a market where AI data center power demand is rising faster than many grid planners expected. Modern AI training and inference workloads drive sustained electricity consumption, and the load profile can be less flexible than earlier generations of cloud computing. As a result, developers are pursuing more direct pathways to secure generation, storage, and interconnection rights rather than relying solely on standard utility procurement cycles.

This shift is also a hedge against timing risk. Even when a data center is ready to open, energizing it can be delayed by transmission upgrades, transformer shortages, and permitting. Owning or closely partnering with power development can reduce bottlenecks, improve visibility on delivery dates, and potentially lower long-run costs by designing energy supply around specific campuses.

What Intersect brings to the table

Intersect positions itself as a developer focused on scaling and diversifying energy supply, with an emphasis on clean generation and storage that can be deployed relatively quickly compared with some conventional builds. For large buyers, the appeal is a portfolio approach: multiple sites, multiple technologies, and staged timelines that can be matched to a rolling schedule of data center demand.

The clean energy developer deal also reflects a broader build-versus-buy calculation. Instead of negotiating separate offtake contracts for each site, acquiring a development platform can provide a pipeline of opportunities, a team that understands permitting and interconnection, and a structure that can coordinate energy and data center buildouts as a single program.

Partnerships and the widening ecosystem around data centers

Alphabet has been expanding its energy relationships beyond any single transaction. Earlier this month, it broadened a NextEra partnership expansion tied to building new energy supplies for its U.S. operations, part of a wider push to secure capacity at scale. Taken together, these moves signal that large technology firms are constructing an ecosystem of developers, utilities, and financiers to support the next wave of computing growth.

That ecosystem is not only about megawatts. It also includes grid services, storage integration, and emerging technologies aimed at smoothing intermittency and reducing peak strain. Intersect has indicated it will explore additional technologies to increase and diversify energy supply, which points to a roadmap that may include longer-duration storage, advanced grid management, and other approaches that can improve reliability at high utilization rates.

Local impacts and the politics of growth

As data centers proliferate, communities and regulators are increasingly scrutinizing who pays for upgrades and how costs flow through to electricity bills. Large new loads can drive investment in local substations and transmission, and while those upgrades can strengthen regional grids, they can also raise questions about allocation and fairness, especially when growth is rapid.

For developers and corporate buyers, that means social license is becoming a project variable. Timelines can be affected not only by engineering, but also by local hearings, zoning debates, and public concerns about water use, land use, and affordability. Aligning new generation and storage with data center expansion can mitigate some pressure, but it does not eliminate the need for careful community engagement.

Risks and what investors will watch next

The near-term focus will be on execution and the boundaries of what the acquisition actually accelerates. Development pipelines can be large on paper, but they still depend on permits, interconnection agreements, equipment availability, and financing conditions. Any slippage can translate into data center delays, higher interim power costs, or the need to procure capacity elsewhere.

Investors will also watch how the separation of certain operating assets affects strategic flexibility. A clean split can preserve stability, but it can also create coordination challenges if assets and development pipelines must be synchronized across different ownership structures. Finally, the broader sector risk remains grid congestion: if interconnection queues lengthen and transmission buildouts lag, even well-capitalized buyers may find that power delivery becomes the pacing item for growth.

For Tredu, the takeaway is that electricity is now a front-line constraint in the AI expansion cycle, and this transaction is a bid to control more of the timeline. The success of the Alphabet Intersect acquisition will be measured less by the headline price and more by how quickly new generation and storage can be delivered to the places where AI demand is rising fastest.