Alphabet has announced a major acquisition aimed at strengthening its artificial intelligence infrastructure, agreeing to buy data centre and energy infrastructure company Intersect in a deal valued at $4.75 billion in cash, along with the assumption of the company’s existing debt. The move underscores Alphabet’s intent to secure long-term capacity for AI growth at a time when computing power and energy availability have become strategic bottlenecks across the tech industry.
Under the terms of the deal, Intersect will continue to operate under its own brand rather than being folded directly into Google or Alphabet. The company will, however, work closely with Google’s internal infrastructure teams as Alphabet accelerates the construction of new data centres and expands its power generation capabilities. Alphabet said the structure would allow Intersect to remain operationally focused while aligning closely with Google’s fast-growing infrastructure demands.
The acquisition is not Alphabet’s first involvement with Intersect. Google already held a minority stake in the company following a funding round in December 2024. Since then, the two companies have been collaborating on a co-located data centre and power generation site in Texas, a project that will now be included as part of the acquisition. That collaboration appears to have laid the groundwork for a deeper partnership, culminating in Alphabet’s decision to bring Intersect into its broader infrastructure strategy.
A key aspect of the deal is Alphabet’s focus on energy independence and grid impact. In its announcement, the company highlighted plans to build new data centres without passing additional costs onto local grid customers, a growing concern in the United States as AI-driven power demand pushes electricity infrastructure to its limits. Data centres have increasingly been blamed for rising energy prices in certain regions, and Alphabet appears keen to position this acquisition as a way to scale responsibly.
Not all of Intersect’s existing assets will remain part of the transaction. Alphabet confirmed that the company’s current projects in Texas and California will be spun off into a separate independent business. This suggests that the acquisition is less about absorbing Intersect’s entire portfolio and more about leveraging its expertise, operating model and future development pipeline.
Intersect was founded in 2016 and specialises in combining data centre construction with energy infrastructure planning, an area that has become critical as AI workloads demand both massive computing capacity and stable power supply. Its current chief executive, Sheldon Kimber, will remain in his role following the acquisition, providing continuity as the company deepens its collaboration with Google.
Alphabet and Google chief executive Sundar Pichai said the acquisition would help the company expand capacity while building new power generation in parallel with rising data centre demand. He added that Intersect’s approach could help Alphabet rethink how energy solutions are designed and deployed, supporting broader goals around innovation and long-term leadership in the United States.
The deal comes as Alphabet, like many of its peers, is spending aggressively to support AI development. Training and running large-scale models requires enormous amounts of compute, and securing that capacity has become a competitive differentiator. By investing directly in data centre and energy infrastructure, Alphabet is seeking to reduce dependency on third parties and gain more control over costs, timelines and sustainability outcomes.
Alphabet expects the acquisition to close in the first half of 2026, subject to regulatory approvals and customary closing conditions. Once completed, the deal is likely to play a central role in how Google scales its AI platforms over the next decade, particularly as demand for generative AI, cloud services and high-performance computing continues to surge.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
