Alphabet Reaches Nearly $5B Deal To Buy Data Center Firm Intersect

Google parent Alphabet reached an agreement to acquire data center and energy infrastructure developer Intersect for $4.75B in cash plus the assumption of debt, the tech giant announced Monday. 

In San Francisco-based Intersect, Alphabet is acquiring an established powered-land developer that specializes in providing sites for hyperscale data centers colocated with gas generation, renewables and other power infrastructure.

Intersect has $15B deployed toward infrastructure projects in operation or under construction, representing 10.8 gigawatts of total capacity expected to be online or in development by 2028, according to its website. 

Within that portfolio are a number of data center campuses currently being developed jointly with Google, which already owned a minority stake in Intersect from a prior funding round. 

Like other Big Tech companies driving the AI data center boom, Google is increasingly utilizing direct, behind-the-meter power agreements with energy developers. This approach allows the tech firms to immediately secure the gigawatts of electricity needed to power the data centers essential for their artificial intelligence ambitions.

These arrangements offer a speed advantage, often delivering power to data center projects more quickly than traditional utility grid power, where interconnection in power-constrained markets can routinely take over five years. 

“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,” Alphabet CEO Sundar Pichai said in a press release.

Alphabet also framed its acquisition of Intersect in part as an effort to avoid adding more strain to overwhelmed grid systems and potentially driving up electricity costs for other grid customers. 

Through the transaction, the tech giant is acquiring a number of data center and energy projects totaling multiple gigawatts that were initiated through the firms’ preexisting partnership. This includes a colocated data center and power site under construction in Haskell County, Texas. 

Not all of Intersect’s assets will be included in the deal. The firm has a number of sites — both in operation and in development — in Texas and California that will continue to operate as their own independent company supported by existing investors.