Alphabet Planning on Acquiring Data Center Firm Intersect

Google’s parent company, Alphabet, announced on Monday that it will acquire Intersect, a data center & energy infrastructure company, for $4.75 billion in cash, plus any outstanding debt. 

Alphabet stated that Intersect will remain a separate entity, with the primary motive for the acquisition being to bring more data center and generation capacity, enable faster online deployment, and expand energy generation. 

In recent years, Google has found itself at the center of a heated rivalry with AI competitors such as OpenAI, which started the so-called ‘AI Boom’ with its generative AI model, ChatGPT, in 2022. Moreover, OpenAI has pledged more than $1.4 trillion to build the data centers it needs to meet the growing demand for its technology and stay ahead of the curve, as the market becomes highly competitive over the next 5 years. 

With its Intersect acquisition, Google plans to do the same. According to Sundar Pichai, the CEO of Google and Alphabet, “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.”

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It’s worth noting that Google already held a substantial stake in Intersect through a funding round announced in December last year. In a release at the time, Intersect shared that through its strategic partnership with Google, it plans to develop gigawatts of data center capacity across the US, including a $20 billion investment in renewable power infrastructure by the end of the decade.