Alphabet announced on Monday that it will buy clean energy developer Intersect for $4.75 billion, in addition to assuming debt, at a time when technology giants are investing billions to expand the computing capacity and energy needed to develop artificial intelligence.
Big tech companies have stepped up investments in energy companies as U.S. power grids struggle to keep up with rising demand for electricity generated by generative artificial intelligence, amid an ever-increasing race to capitalize on this booming technology.
Under the terms of the deal, Google’s parent company will acquire Intersect’s energy projects and data centers that are in development or under construction.
The company has US$15 billion in assets, whether operating or under construction. By 2028, Intersect projects, representing about 10.8 gigawatts of power, are expected to be online or in development. This is equivalent to more than 20 times the electricity produced by the Hoover Hydroelectric Power Plant.
The acquisition adds to a series of Alphabet investments and partnerships in the energy sector. Earlier this month, utility company NextEra expanded its partnership with Google Cloud to build new power sources for its US operations.
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Google, along with TPG Rise Climate, backed Intersect as part of a more than $800 million funding round in December last year. That announcement also included plans to develop industrial parks to house gigawatts of data center capacity, located next to new clean energy plants.
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Intersect’s operations will remain separate from Alphabet. The company’s existing operating assets in Texas and its operating and development assets in California will not be part of the acquisition and will operate as an independent company with the support of current investors, Alphabet said.
Its projects in Texas include Quantum, a clean energy storage system that is being built next to a Google data center complex.
Intersect will also explore a range of emerging technologies to increase and diversify energy supplies, while supporting Google’s investments in US data centers, Alphabet said.
