Alphabet buys the grid to save its AI future
Alphabet's $4.75B acquisition of Intersect signals a shift in the AI wars. Tech giants are no longer just buying chips; they are buying the power grid itself to keep them running.
Sundar Pichai, CEO of Alphabet
The era of Big Tech simply "buying power" is over, now they are buying the power plants. In a move that explicitly acknowledges the US energy grid’s failure to keep pace with artificial intelligence, Alphabet (GOOGL) has agreed to acquire energy infrastructure firm Intersect for $4.75 billion.
This isn't just an acquisition; it is a frantic attempt to secure the physical rails of the AI economy.
The all-cash deal, announced Monday, sees Alphabet absorb Intersect’s development pipeline and team, though it crucially leaves some existing operating assets in Texas and California as independent entities. The strategy is clear: Google is no longer willing to wait for utilities to catch up. By bringing Intersect in-house, Google secures a pipeline of 10.8 gigawatts of power expected to be online or in development by 2028, enough to power a small nation, or perhaps, just enough to keep Gemini running.
The acquisition comes at a critical moment for Google’s environmental optics. The company admitted in 2024 that its carbon emissions had surged by 48% over five years, largely driven by the insatiable energy appetite of its data centers. Sundar Pichai, CEO of Alphabet, framed the deal as an operational necessity rather than just a green initiative:
"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."
By vertically integrating energy generation, Google is bypassing the traditional "request and wait" model of grid interconnection. They are betting that owning the electrons is the only way to guarantee the compute.
Vertical Integration is the New Green We expect this deal to trigger a domino effect among the "Hyperscalers" in Q1 2026. Microsoft and Amazon are now arguably behind the curve in securing direct-ownership energy assets. Expect at least one major nuclear or geothermal acquisition by a rival tech giant before summer.
