Alphabet has agreed to acquire US clean energy developer Intersect for $4.75 billion in cash plus assumed debt, signalling how artificial intelligence is reshaping electricity strategy at the highest corporate level. The deal is designed to lock in long term clean power capacity for Alphabet’s rapidly expanding data centre footprint across the United States, where AI workloads are pushing electricity demand into uncharted territory. The transaction places Alphabet among a growing cohort of technology companies that are no longer relying solely on power purchase agreements. Instead, they are moving directly into ownership and control of generation and storage assets to manage energy risk, pricing, and availability as AI becomes core to business growth.

AI Turns Electricity Into a Strategic Bottleneck

Generative AI has changed the profile of electricity consumption. Training and inference workloads run continuously, draw vast amounts of power, and are concentrated around hyperscale data centres. Across the US, utilities and grid operators are struggling to keep pace with this surge, particularly in regions where transmission constraints and permitting delays limit new capacity. For Alphabet, electricity is no longer a background operating cost. It is a strategic input that determines how quickly and where AI infrastructure can scale. By acquiring Intersect, the company is effectively internalising a critical part of its energy supply chain at a moment when grid access is becoming a binding constraint on growth.

Intersect’s Scale Reflects the Size of AI Demand

Intersect brings with it one of the largest clean energy development platforms in the US. The company currently has around $15 billion of assets either operating or under construction. By 2028, Intersect expects to have projects representing approximately 10.8 gigawatts of capacity online or in development. To put that in context, this level of capacity exceeds the output of many regional power systems and is more than twenty times the electricity produced by the Hoover Dam. The scale underlines how corporate driven demand, rather than public utilities alone, is now shaping the next wave of power generation in the US.

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How the Deal Is Structured

Alphabet has indicated that Intersect will continue to operate as a separate business following the acquisition. Not all of Intersect’s assets are included in the transaction. Its existing operating projects in Texas, as well as both operating and in development assets in California, are excluded and will remain under the ownership of current investors. This carve out reflects the complexity of large scale energy portfolios, where regulatory frameworks, market structures, and contractual obligations vary significantly by state. It also suggests that Alphabet’s focus is on assets that align most closely with its data centre expansion plans.

Texas as a Testbed for Co Located Power

Texas remains central to Alphabet’s clean energy strategy. One of Intersect’s notable projects in the state is Quantum, a large scale energy storage system being built directly alongside a Google data centre campus. Co locating generation and storage with data centres reduces exposure to grid congestion and transmission delays, a growing problem in high growth regions. This approach points to a broader shift in how large electricity consumers think about energy procurement. Rather than sourcing power remotely through the grid, companies are increasingly looking to integrate supply closer to demand, effectively building private energy ecosystems around critical digital infrastructure.

Beyond Renewables: Diversifying Supply

Alphabet has also said that Intersect will explore emerging technologies to expand and diversify energy supply in support of Google’s US data centre investments. While details remain limited, this signals openness to solutions beyond conventional solar and wind, potentially including advanced storage, firm clean power technologies, or hybrid systems designed to deliver round the clock reliability. As AI workloads require uninterrupted power, intermittency becomes a commercial risk rather than an abstract planning issue. Ownership of a diversified energy portfolio gives Alphabet more flexibility to manage that risk internally.

Explore OneStop ESG Marketplace: Renewable Energy

Big Tech Reshapes US Power Markets

The acquisition highlights a deeper structural change in US power markets. Corporate demand, led by technology companies, is increasingly driving where and how new clean energy capacity is built. Grid constraints, long interconnection queues, and slow permitting processes are pushing large buyers to bypass traditional procurement models. For utilities and regulators, this raises important questions about grid planning, cost allocation, and market design. When private companies build generation primarily to serve their own load, the balance between public and private power infrastructure begins to shift.

Energy Strategy Becomes Core to AI Economics

Alphabet’s Intersect deal underscores a simple reality of the AI era. Electricity availability is now inseparable from digital competitiveness. Securing clean, reliable, and scalable power has become as strategic as securing talent or compute hardware. As generative AI continues to expand, similar moves by other technology giants are likely to follow. The result will be a power market increasingly shaped by corporate balance sheets, where clean energy is not just a sustainability commitment but a prerequisite for growth in the AI driven economy.

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