Alphabet to Buy Intersect Power for $4.75B to Fuel AI Ambitions
The cash deal for the clean energy developer marks a strategic push by the Google parent to secure power for its energy-intensive data centers amid a tech arms race.
Alphabet Inc. (GOOGL) has agreed to acquire Intersect Power, a major developer of clean energy projects, for $4.75 billion in an all-cash transaction designed to power its sprawling and energy-intensive artificial intelligence operations.
The deal, announced Monday, signals a decisive strategic shift for the technology giant, as it moves to directly control power generation assets to quench the growing thirst of its data centers. Shares of Alphabet were trading up 0.5% at $308.76 in afternoon trading as investors digested the move to vertically integrate a critical component of its infrastructure. The acquisition underscores the escalating energy demands of the AI arms race, where computational power is a key competitive advantage.
According to a Bloomberg report, the deal is expected to close in the first half of 2026, pending regulatory approvals. Intersect Power will reportedly continue to operate as a separate entity under its existing leadership, suggesting Alphabet values the company's standalone expertise in the complex energy market.
This acquisition comes as Alphabet grapples with the enormous energy footprint of its AI and cloud services. The company's electricity consumption has surged in recent years, with data centers accounting for the vast majority of that growth. Securing a direct, renewable power source is seen not only as a way to manage costs but also to meet Alphabet's ambitious corporate sustainability goals of operating on 24/7 carbon-free energy.
Intersect Power has a significant portfolio of operational and in-development solar, wind, and battery storage projects, with key assets located in Texas and California. These locations are strategic hubs for Alphabet's existing and planned data center campuses. By acquiring the developer, Alphabet is not just buying electricity—it is buying control over the development pipeline, insulating itself from volatile energy markets and transmission constraints.
The $4.75 billion price tag, while substantial, is a manageable figure for a company with a market capitalization of approximately $3.66 trillion. The move is part of a broader trend of tech titans like Amazon, Microsoft, and Meta Platforms making significant investments in the energy sector to secure power for their cloud and AI infrastructure.
Analysts view the deal as a logical and necessary step in Alphabet's long-term strategy. With Wall Street maintaining a strongly bullish outlook on the stock—evidenced by 58 'Buy' or 'Strong Buy' ratings and an average price target of $328.73—the investment in energy security is likely to be seen as a defensive moat around its core businesses. It ensures that its ability to deploy next-generation AI models will not be hampered by energy availability, a growing concern for the entire technology sector.
For Alphabet, the acquisition of Intersect Power is a direct investment in the infrastructure that will fuel its future growth. As large language models become more sophisticated and data-intensive, the ability to power them cleanly and reliably will be as crucial as the algorithms themselves. This deal marks a critical step in ensuring that the engine of Alphabet's innovation has the fuel it needs to run.