Alphabet’s Bold Move: Acquiring Intersect
Dive Brief:
Last month, Alphabet, the parent company of Google, announced its plans to acquire clean energy and data center infrastructure developer Intersect in a staggering $4.75 billion deal. This acquisition is expected to close in the first half of the current year. Notably, the operations of Intersect will remain distinct from Google and Alphabet, with its founder and CEO, Sheldon Kimber, retaining his position.
The deal includes existing investors purchasing portions of Intersect’s assets, operating them as a separate entity. Google already holds a minority stake in Intersect and previously collaborated on a significant project to develop data centers that are co-located within energy parks. This partnership, established in 2024, involves a massive investment of $20 billion aimed at renewable energy and battery storage systems.
Dive Insight:
This acquisition comes at a crucial time as Google faces increasing emissions, largely due to the growing influence of artificial intelligence. Their latest sustainability report revealed that they are prioritizing the decarbonization of operational electricity consumption, particularly in their data centers and offices. Google aims to make ambitious climate goals a reality, including achieving net-zero emissions across its supply chain by 2030. However, despite their efforts, overall emissions surged by 51% in 2024 from a baseline established in 2019.
Alphabet’s acquisition will facilitate the transfer of projects currently under construction that emerged from the partnership between Google and Intersect. Founded in 2016, Intersect boasts a portfolio valued at $15 billion, featuring infrastructure projects with a clean energy capacity projected to reach 10.8 gigawatts by the end of 2028.
Among the projects Alphabet will acquire are ongoing developments in Texas and California, including a notable solar and wind initiative in Texas that is expected to yield approximately 3.6 gigawatts of combined capacity along with 3.1 gigawatt hours of battery energy storage.
Innovative Energy Solutions:
CEO Sundar Pichai emphasized that the acquisition of Intersect will help Google expand capacity and improve agility in building new power generation facilities aligned with data center demands. He envisions reimagining energy solutions that will drive innovation and leadership in the U.S.
Kimber echoed this sentiment, describing the acquisition as a natural progression of their existing partnership. He pointed out that the U.S. electric power industry is a bottleneck for artificial intelligence development. The evolving business model in energy appears to be gravitating toward a “bring your own generation” approach. Kimber emphasized that modern energy infrastructure is now crucial for American competitiveness in AI, a belief shared between Intersect and Google.
A Shift in Strategy:
The investor-led company, which includes sustainable investors such as TPG Rise Climate and Climate Adaptive Infrastructure, will oversee Intersect’s operating assets in Texas and California. This separate entity will also manage an in-development solar power project of 1.6 gigawatts alongside a 4.8 GWh battery storage initiative in California.
This acquisition marks a significant shift in Alphabet’s strategy towards decarbonization. In the past, the company typically partnered with utilities and energy developers to bring new clean power generation online. Recent partnerships include various innovative energy deals, such as nuclear power generation initiatives, offshore wind agreements in the Asia-Pacific region, and groundbreaking carbon capture projects.
Google’s Climate Goals:
Looking ahead, Google is determined to halve its scope 1, 2, and absolute scope 3 emissions while committing to operate globally on 24/7 carbon-free power by 2030. The 2025 sustainability report revealed a troubling 22% increase in scope 3 emissions for 2024, effectively negating prior reductions in scopes 1 and 2. These findings illuminate the challenges in achieving set climate objectives, despite notable advancements in reducing emissions from data centers.
In this evolving landscape of energy and technology, Alphabet’s acquisition of Intersect not only augments its operational capabilities but also positions it as a pivotal player in the ongoing discourse surrounding clean energy and sustainable practices in tech. The integration of Intersect’s innovative projects will play a critical role in furthering Google’s journey towards long-term sustainability and efficiency.