Google Is Spending Over $4 Billion on a Data Center Company

Alphabet, Google’s parent company, announced on Monday that it has agreed to buy the data center and energy company Intersect in a deal worth $4.75 billion. Intersect specializes in developing data center projects alongside energy plants, a pairing that makes a lot of sense as data centers are known to strain the power grid.

Alphabet had previously invested in Intersect, but now it’s buying the company outright.

“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,” said Alphabet CEO Sundar Pichai in a press release.

Under the terms of the deal, Intersect will continue to operate separately from Alphabet and Google under the Intersect brand. The acquisition could help speed the development of data center campuses that Google has planned for AI infrastructure in Armstrong and Haskell counties in Texas, where the company is spending $40 billion.

The deal comes as AI companies increasingly claim that more computing power, and by extension more data centers, will translate into faster progress toward more advanced AI models. With no one eager to fall behind, companies like Google, OpenAI, and Microsoft have all announced plans to pour billions of dollars into new data center projects.

Those projects are spreading rapidly across the country. But not everyone is thrilled to have an energy-guzzling data center move into their backyard.

Rising electric bills tied to data center growth became a flashpoint in local elections this year. CNBC recently reported that in some states with high concentrations of data centers, electricity bills have risen faster than the national average.

Lawmakers are starting to take notice. In Minnesota, legislators introduced several bills this year aimed at putting guardrails on the data center industry, including new rules governing energy and water consumption, as well as measures designed to prevent ordinary utility customers from subsidizing data centers’ massive power demands.

Even Sen. Bernie Sanders has called for a moratorium on the construction of new data centers. In a post on X, Sanders said a pause is necessary to “give democracy a chance to catch up, and ensure that the benefits of technology work for all of us, not just the 1%.”

Beyond higher electricity bills, some research suggests data centers may carry broader public health risks. One study estimates that the total public health burden of U.S. data centers could exceed $20 billion per year by 2028, largely due to air pollution from backup generators and electricity generation.