Alphabet Acquiring Data Center Firm Intersect

Google’s parent company is set to acquire Intersect, a company providing data center and energy infrastructure solutions.

The $4.75 billion deal is designed to allow more artificial intelligence (AI) data center and generation capacity to come online more quickly while accelerating energy development and innovation, Alphabet said in a Monday (Dec. 22) news release.

“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. We look forward to welcoming Sheldon and the Intersect team,” said Sundar Pichai, CEO of Google and Alphabet.

The deal gives the tech giant access to Intersect’s team and multiple gigawatts of energy and data center projects that are either in development, or under construction, from an existing partnership with Google.

“Intersect will also explore a range of emerging technologies to increase and diversify energy supply, while supporting Google’s U.S. data center investments to meet its Cloud customers’ and users’ demand,” the release added.

Intersect’s operations will remain separate from Alphabet and Google under the Intersect brand and will be overseen by founder and CEO Sheldon Kimber. The company says the deal is within keeping with Google’s efforts to increase energy supply while promoting “the rapid commercialization” of advanced energy technologies.”

As covered here earlier this year, Google and a number of other tech companies are investing heavily in data centers amid growing demand for AI.

Google told PYMNTS earlier this year that it plans to spend $25 billion on data centers and AI infrastructure in the PJM electric grid region over the next two years. PJM, a regional transmission organization, coordinates the movements of wholesale electricity in 13 states and Washington, D.C., for a coverage area that stretches from New Jersey to North Carolina and Illinois to the nation’s capital.

Experts have told PYMNTS that the U.S. may need to rethink its methods of expanding its power infrastructure to meet AI demand.

“If the U.S. only relies on traditional approaches to expand the country’s power infrastructure to meet AI infrastructure’s voracious appetite for power, the U.S. will fall behind on its plans to lead in AI globally,” Allan Schurr, chief commercial officer at energy transition company Enchanted Rock, told PYMNTS. “Delays in adding new transmission and generation capacity, which can range from three to 10-plus years, will force companies to seek out alternative locations to support AI infrastructure.”