Alphabet’s move to acquire Intersect, which provides data centre and energy infrastructure solutions, for $4.75 billion in cash, along with taking on its existing debt, marks a shift in its AI and cloud infrastructure strategy. The acquisition, announced on December 22, underscores how quickly the rise of generative AI has strained traditional power and data centre systems, and how aggressively Alphabet intends to secure the energy needed to support its next phase of computing growth.
AI-driven workloads are reshaping the economics and physical constraints of data centre expansion. What once hinged on server efficiency and cooling systems now depends on electricity supply to operate at scale. News reports suggest that US data centres consume around 6 percent of national electricity, and analysts expect it to climb to roughly 11 percent by 2030. This has led to grid congestion, delays in interconnection approvals, and increasing pressure on utilities that are struggling to keep pace with hyper-scaler demand.
Competitive pressure is also mounting. OpenAI has committed more than $1.4 trillion to future data centre and power infrastructure. Against this backdrop, Alphabet’s acquisition reflects the fact that access to reliable, large-scale power will determine who leads in the AI sector.
Why Alphabet wants a data centre energy hybrid developer
Intersect is distinct from conventional data centre companies because it develops power generation and compute infrastructure together, not as separate tracks. Alphabet already had a minority stake in it through a previous funding round; taking full ownership gives it greater influence over how future projects are designed, sequenced, and integrated with Google’s AI roadmap.
“Intersect has always been focussed on bringing innovation to the industry and we look forward to accelerating at scale as part of Google,” said Sheldon Kimber, founder and CEO, Intersect, in a press release. “Modern infrastructure is the linchpin of American competitiveness in AI. We share Google’s conviction that energy innovation and community investment are the pillars of what must come next.”
Alphabet has described the deal as a way to accelerate the building of new capacity. CEO Sundar Pichai said the acquisition will allow Alphabet to “expand capacity” and “build new power generation in lockstep with new data centre load”, an acknowledgment that tomorrow’s AI facilities cannot rely on traditional utility timelines. By embedding energy planning directly into data centre development, Alphabet hopes to bypass the bottlenecks that have slowed the rest of the industry.
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Alphabet is not alone in confronting these constraints. Amazon recently backed out of a $150 million construction advance connected to a proposed 11 GW data centre project after encountering difficulties in securing the necessary electricity. The withdrawal highlighted how even the most resource-rich tech companies are running into power shortages and slow-moving energy approval processes. Bloomberg reported that energy scarcity is pushing major technology companies and investors into the utility and infrastructure sectors, creating a wave of M&A activity aimed at securing future power supplies.
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Alphabet’s acquisition is expected to close in the first half of 2026, pending regulatory approval. Once completed, Intersect will continue to operate as a separate business under its current leadership while collaborating closely with Google’s technical infrastructure teams.
Naini Thaker is an Assistant Editor at Forbes India, where she has been reporting and writing for over seven years. Her editorial focus spans technology, startups, pharmaceuticals, and manufacturing.
