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

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

Alphabet previously invested in Intersect, but is now buying the company outright.

“Intersect will help us expand capacity, work more efficiently in building new power generation in lockstep with new data center load, and reimagine energy solutions to drive American innovation and leadership,” Alphabet CEO Sundar Pichai said 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 accelerate the development of data center campuses that Google plans for AI infrastructure in Armstrong and Haskell counties in Texas, where the company is spending $40 billion.

The deal comes as AI companies are increasingly claiming that more computing power, and by extension more data centers, will translate into faster progress toward more advanced AI models. No one is keen to back down, with companies like Google, OpenAI and Microsoft announcing plans to pour billions of dollars into new data center projects.

Those projects are expanding rapidly across the country. But not everyone is thrilled about having an energy-guzzling data center in their backyard.

Rising electricity bills associated with data center development became an issue in local elections this year. CNBC recently reported that in some states with high concentrations of data centers, electricity bills have increased faster than the national average.

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

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

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



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