Alphabet has agreed to acquire data centre and clean energy developer Intersect Power in a deal valued at $4.75 billion in cash, along with the assumption of debt. The acquisition directly addresses what Google CEO Sundar Pichai has openly described as the single biggest constraint on the future of artificial intelligence: electricity.
As Google and other technology giants race to scale AI infrastructure, power availability has emerged as a hard physical limit. Pichai has warned that energy shortages could determine which companies and countries lead the next phase of economic growth driven by AI, making infrastructure as critical as chips and software.
Speaking recently about the challenge, Pichai said that identifying system constraints is key to understanding progress. In his view, electricity is now the most likely bottleneck for AI development, with implications that extend beyond technology into productivity and GDP growth. He has admitted that this issue is a constant concern for him.
The Intersect Power deal is a direct response to that concern. Through the acquisition, Alphabet gains access to a large pipeline of energy and data centre projects already under development, measured in multiple gigawatts of capacity. More importantly, it allows Google to rethink how data centres are powered.
Rather than relying on public utility grids that are increasingly strained, Google will be able to co-locate computing facilities with dedicated power generation. This model brings wind, solar, battery storage and gas generation directly alongside data centres, reducing dependence on permitting delays, grid congestion and local supply limitations.
Intersect Power will continue to operate independently under its founder and chief executive, while working closely with Google’s infrastructure teams. Google already had a minority stake in the company following a major funding round last year, making this acquisition a deepening of an existing relationship rather than a sudden pivot.
The urgency behind the move has become increasingly clear. Pichai has acknowledged that Google’s cloud business is already supply constrained, not because of demand, but due to physical limitations in bringing new capacity online. He has pointed to delays caused by permitting, shortages of skilled electricians and overlapping expansion efforts across the industry.
According to Pichai, if current trends continue, these constraints will become even more visible as AI deployment accelerates. He has also framed the issue as a geopolitical one, arguing that solving energy infrastructure challenges is essential for the US to remain competitive with China in advanced technology.
One of the first projects under the new partnership is already under construction in Haskell County, Texas. It combines data centre infrastructure with on-site power generation and forms part of Google’s broader $40 billion investment plan in the state through 2027.
Not all of Intersect Power’s assets are included in the deal. Its existing operational projects in Texas and California will continue as a separate company backed by long-term infrastructure investors. The acquisition focuses instead on future development capacity and engineering expertise.
Alphabet has also indicated that the deal aligns with its longer-term energy strategy. The company plans to invest in advanced geothermal systems, long-duration energy storage and carbon capture technologies. It also intends to use AI itself to speed up grid connections and optimise how new power plants are brought online.
Subject to regulatory approvals and customary closing conditions, the transaction is expected to close in the first half of 2026.
The acquisition underscores a fundamental shift in how AI leaders are thinking about scale. For Google, energy is no longer a background utility cost. It is now a strategic asset, and controlling access to power may prove just as important as building better models or faster hardware in the years ahead.
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