Key points:
- Google’s parent company Alphabet is acquiring Intersect, a data center and energy company, to meet the increasing demands of AI and improve energy reliability.
- The $4.75 billion deal will give Google access to multiple gigawatts of energy and data projects, and help the company build out new power capacity.
- The acquisition signals a shift in Google’s energy strategy, as the company looks to reduce its dependency on third-party energy partners and improve its ability to deliver power to its data centers.
According to sources, Google is taking a major step to address the increasing demands of AI on its infrastructure. The company’s parent, Alphabet, has announced plans to acquire Intersect, a data center and energy company, in a deal worth $4.75 billion. This move is expected to help Google improve its energy reliability, reduce power delays, and support the development of alternative energy sources. Thomas Randall, research lead at Info-Tech Research Group, notes that AI infrastructure is currently at capacity, and there are concerns about whether upcoming investments in data centers will be able to meet demand on time.
The acquisition of Intersect will give Google access to multiple gigawatts of energy and data projects, including a co-located data center and power site currently under construction in Texas. Google will absorb Intersect’s team and continue to work on these projects, as well as build out new ones. However, Intersect’s existing assets in Texas and California will not be part of the deal and will continue to operate as an independent entity.
Google is committed to working with energy and utility companies to unlock abundant, reliable, and affordable energy supply to support its data center buildouts. This acquisition is just the latest step in the company’s efforts to build out its power capacity. Earlier this year, Google announced a partnership with NV Energy to bring 115MW of clean energy to Nevada’s grid. The company is also working with Energy Dome on CO2 battery innovations and is supporting carbon capture and storage technologies at a gas power plant in partnership with Broadwing Energy.
Sanchit Vir Gogia, chief analyst at Greyhound Research, notes that Google’s acquisition of Intersect is a recognition that the traditional model of relying on utilities and third-party energy developers is no longer dependable in the AI era. Google needs a way to bring megawatts online with predictability, and Intersect provides a developer-style operating model that can deliver this. The acquisition also reduces Alphabet’s dependency on third-party energy partners and allows the company to coordinate the sequencing of compute and power delivery.
This move has significant implications for data center managers, who should tie their energy strategy to capacity planning, sustainability goals, and competitive positioning. Randall advises that CIOs should assume that some capacity will be constrained and plan for alternatives far before projects are underway. Gogia notes that power risk strategy and stakeholder management are critical components of data center planning, and that enterprises should learn from Google’s approach to managing perceptions and social license.
Overall, Google’s acquisition of Intersect is a significant shift in the company’s energy strategy, and one that will have far-reaching implications for the tech industry. As AI continues to drive demand for more powerful and reliable infrastructure, companies like Google are taking bold steps to ensure they can deliver the power and capacity needed to support their operations. Microsoft, Azure, and other cloud providers will likely be watching this development closely, as they consider their own strategies for meeting the increasing demands of AI.
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