Google parent Alphabet buys data center and energy firm in $4.75B deal
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Google and Alphabet CEO Sundar Pichai speaks in 2024. Photo: Justin Sullivan/Getty Images
Alphabet will acquire Intersect Power, a data center and power infrastructure firm, in a deal valued at $4.75 billion plus debt, the companies said Monday.
Why it matters: Tech giants are aggressively hunting for power to serve energy hungry data centers that train AI models and handle queries.
Driving the news: The transaction includes "multiple gigawatts of energy and data center projects in development, or under construction" from Intersect's existing partnership with Google, they said.
- Google and the climate investor TPG Rise Climate unveiled that strategic deal with Intersect last year, and Google has a minority stake in the company.
State of play: Intersect will continue to operate as a separate brand that CEO Sheldon Kimber will lead, the announcement states.
- It will "partner closely" with Google on new and existing projects, including a co-located data center and power development in Haskell County, Texas.
- The companies expect the deal to close in the first half of next year.
Yes, but: The deal for Intersect — which co-locates industrial energy demand with natural gas and renewable generation — doesn't include its existing assets in Texas, and existing and in-development projects in California, they said.
- Those assets will be operated as a separate, independent company, supported by existing investors TPG Rise Climate, Climate Adaptive Infrastructure, and Greenbelt Capital Partners, the announcement states.
- Kimber, in a separate blog post, said more information on this will emerge in the coming weeks.
Flashback: The Google-Intersect-TPG partnership announced last December envisions "catalyzing" $20 billion in renewables infrastructure investment this decade, Intersect said at the time.
The big picture: There's growing interest among regulators, tech companies and some power providers in co-locating big data centers and new power sources.
- The blog post from Kimber, the Intersect CEO, argues that data centers built alongside renewables, batteries, and "flexible" backup sources are the "fastest, cheapest, and most reliable way to bring new energy online."
What's next: The deal is slated to close in the first half of next year, the companies said.
- "Intersect will help us expand capacity, operate more nimbly in building new power generation in lockstep with new data center load, and reimagine energy solutions to drive US innovation and leadership," Sundar Pichai, CEO of Google and Alphabet, said in a statement.
Editor's note: This story has been corrected to reflect that debt is added (it is not included) in the deal's $4.75 billion value. It also has been updated with additional reporting.
