Overview
Alphabet just agreed to buy Intersect for $4.75 billion in cash plus assumed debt. It’s a big, blunt admission: the race for AI isn’t just about chips and models anymore—it’s about who can secure electricity and build fast enough to use it.
The stakes are bigger than one acquisition. If Alphabet can reliably pair new data centers with new power, it can scale AI capacity without waiting in the same interconnection lines as everyone else. If it can’t, Google risks being outbuilt by rivals who are treating the grid like a strategic battlefield.
Key Indicators
People Involved
Organizations Involved
Alphabet is buying infrastructure capabilities because the AI race is now constrained by megawatts, not ideas.
Google is turning data centers into energy projects because the grid can’t keep up.
Intersect builds the power-and-site puzzle pieces hyperscalers need before they can pour concrete.
TPG Rise Climate helped turn Intersect’s co-location idea into a bankable platform.
PJM is the kind of grid bottleneck that makes co-location and private buildouts tempting.
Timeline
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Alphabet agrees to buy Intersect for $4.75B plus assumed debt
M&AAlphabet said the deal adds multiple gigawatts of data center and power projects in development or construction. Intersect will keep its brand, while certain operating assets are excluded from the acquisition scope.
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Google announces huge Texas data center investment plan
ExpansionGoogle outlined a major Texas buildout through 2027 as it scaled AI data center infrastructure.
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NextEra expands Google Cloud partnership around new campus-style builds
PartnershipNextEra and Google Cloud broadened plans for gigawatt-scale data center campuses integrated with new generation.
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Google maps a $25B data center push across the PJM region
ExpansionGoogle announced large near-term data center and AI infrastructure spending tied to the U.S.’ biggest grid region.
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Google pitches AI tools to speed up grid interconnection work
TechnologyGoogle announced work with PJM and its incubator Tapestry to improve grid data and interconnection workflows.
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Intersect markets Texas sites for multi-gigawatt data center loads
DevelopmentIntersect disclosed talks with hyperscalers for massive Texas panhandle sites capable of gigawatt-scale campuses.
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Co-location goes mainstream as AI power demand spikes
IndustryA wave of Big Tech projects began pairing data centers with nearby generation as grids strained under rising demand.
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Google, Intersect, and TPG pitch “power-first” co-located campuses
PartnershipThe trio announced a partnership to co-locate data centers with new clean power and storage, plus a large funding round.
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TPG Rise Climate leads major Intersect growth round
MoneyIntersect announced a $750M growth equity investment to scale renewables, storage, and new products.
Scenarios
Deal Closes, Google Starts Shipping “Power-First” AI Campuses Like a Factory
Discussed by: Reuters and Financial Times coverage, plus data center industry reporting on co-location models
Regulators clear the deal and Alphabet keeps Intersect running as a specialized builder. The payoff is speed: land, generation, storage, and data center construction move as one program, not four separate negotiations. Alphabet uses Intersect’s pipeline to bring new U.S. AI capacity online faster than rivals stuck behind transmission upgrades and interconnection queues.
Permits and Interconnection Drag, and the “Multiple Gigawatts” Timeline Slips
Discussed by: Energy and grid reporting on queue backlogs and the real-world limits of co-located builds
Even with ownership, Alphabet can’t buy its way out of local permitting, equipment lead times, and grid constraints. Communities push back on water, land, and reliability impacts; grid operators impose requirements; timelines stretch. The headline benefit—speed—gets diluted, and the acquisition looks more like expensive insurance than a decisive advantage.
AI Demand Cools, and Big Tech Is Left Holding Too Much Concrete
Discussed by: Market commentators who have questioned whether AI infrastructure forecasts are overly optimistic
A demand shock hits—slower enterprise adoption, tighter capital markets, or a shift to more efficient models reduces the need for relentless new capacity. Alphabet still benefits from long-lived assets, but some projects become slower-payback or stranded. Investors start asking why a software company is taking on developer risk at peak-cycle pricing.
Rivals Escalate: The AI Race Turns into a Utility-Scale Arms Race
Discussed by: Ongoing deal chatter and reporting on massive data center and infrastructure M&A
Competitors respond by buying or vertically integrating into power developers, data center operators, and even generation assets. More M&A follows, valuations jump, and regulators start treating hyperscaler energy strategies as system-level risks. Alphabet’s Intersect move becomes the opening shot in a broader reordering of who controls the energy backbone of the digital economy.
Historical Context
Standard Oil’s Vertical Integration Era
1870s–1911What Happened
Standard Oil didn’t just refine oil—it fought to control the chokepoints around it, from pipelines to transport. That control reshaped pricing power and competitive dynamics across an entire industrial stack.
Outcome
Short term: Dominance increased as control of bottlenecks turned into leverage.
Long term: Antitrust pressure culminated in the 1911 breakup and lasting scrutiny of integration.
Why It's Relevant
Alphabet’s move reads like a modern chokepoint play: control the megawatts, control the pace.
Aluminum Smelters Built Around Cheap Hydropower
1900s–1950sWhat Happened
Energy-intensive industries clustered near abundant, cheap electricity, especially hydro. The plant location decision was essentially an electricity procurement decision.
Outcome
Short term: Regions with firm power became industrial magnets.
Long term: Power availability shaped long-lived industrial geography and supply chains.
Why It's Relevant
AI data centers resemble smelters: the product is digital, but the constraint is electricity.
The Late-1990s Fiber Buildout and the Overcapacity Hangover
1998–2002What Happened
Telecom companies and investors poured capital into fiber networks ahead of demand. The infrastructure was real and useful, but the timing and financing assumptions were brutal when growth slowed.
Outcome
Short term: A wave of restructurings and bankruptcies reset pricing.
Long term: The overbuild still enabled cheaper bandwidth and later internet growth.
Why It's Relevant
AI infrastructure may be foundational—but the risk is paying peak prices for tomorrow’s utilization.