On December 22, 2025, Alphabet, the parent company of Google, announced a landmark $4.75 billion acquisition of Intersect Power, a major U.S. developer of clean energy and data center infrastructure. The deal highlights a growing reality in the artificial intelligence era: access to electricity is becoming just as critical as access to advanced AI chips.
Google CEO Sundar Pichai has openly described energy supply as one of his biggest concerns. In recent interviews, including on the All-In Podcast, Pichai warned that electricity availability could become the primary bottleneck limiting AI progress and, by extension, global economic growth. According to him, traditional power grids are already struggling to keep up with the explosive demand created by AI-driven data centers.
Why Energy Is the Biggest Threat to AI Growth
Modern AI systems require enormous computing power, and that power translates directly into massive electricity consumption. Pichai has pointed to several real-world challenges slowing Google’s expansion. Aging grid infrastructure, long permitting timelines, and shortages of skilled labor—such as electricians—are already constraining Google Cloud’s growth. He has also emphasized the geopolitical implications, noting that energy infrastructure will play a decisive role in whether the United States can stay competitive with China in the global AI race.
How Intersect Power Fits Google’s Strategy
The acquisition of Intersect Power represents a strategic shift for Alphabet. Instead of relying solely on public utilities, Google is moving toward a “power-first” model. Intersect specializes in co-locating renewable energy generation—wind, solar, and battery storage—directly next to data centers. This approach allows Google to bypass congested utility grids and avoid years-long waits for new grid connections.
Intersect Power is projected to deliver up to 10.8 gigawatts of energy capacity by 2028, an output roughly 20 times that of the Hoover Dam. Under the agreement, Intersect will continue to operate independently under founder Sheldon Kimber, while working closely with Google’s infrastructure teams to align power generation with AI data center demand.
Texas at the Center of Google’s AI Future
Much of the expansion is centered in Haskell County, Texas, where Google plans to invest $40 billion through 2027 to build a massive AI infrastructure hub. The acquisition is expected to close in the first half of 2026, pending regulatory approval.
A New Reality for Big Tech
Alphabet’s move underscores a fundamental shift in the tech industry. In the AI era, owning GPUs and advanced chips is no longer enough. The companies that dominate AI will be those that also control the energy pipelines powering their data centers. With the Intersect Power acquisition, Google is betting that energy independence will be the key to long-term AI leadership.
