Intersect deal unlocks power generation build-out expertise for Google

Alphabet Inc.'s planned $4.75 billion acquisition of Intersect Power LLC indicates a significant shift in how hyperscalers and other data center infrastructure companies procure both electricity and the skills needed to build power generation, analysts and experts said.

Intersect's assets in Texas and in California, both operating and under development, are not included in the transaction and will operate as an independent company owned by investors Climate Adaptive Infrastructure, Greenbelt Capital Partners and TPG Inc., which are also funding the Alphabet build-out.

Alphabet subsidiary Google LLC already had a minority stake in the independent power producer and renewable energy developer from a prior fundraising round for colocated energy projects, but the deal announced Dec. 22, 2025, marks the first time a data center giant has purchased an entire power company.

Google will gain project development expertise at a time when regulatory processes and equipment and labor shortages make it more difficult to meet mounting demand, according to Matthew Mazzucchi, managing director of the power, utilities and renewables group at investment bank Houlihan Lokey.

Intersect can "unlock from a commitment perspective, a capital perspective, all of the barriers that sometimes get in the way of project development," he said in an interview. "Buying, owning or partnering with the Intersects and NextEras of the world means you can actually get these projects in the ground and done."

Prashant Khorana, director of power and renewables consulting at Wood Mackenzie, agreed that Intersect brings a certain agility to the data center development process.

"They are very strong in batteries in [the Electric Reliability Council of Texas Inc. region], but also in other markets, and if you know how to develop batteries, you probably know how to work in tight land pockets" such as downtown Los Angeles, Khorana said in an interview. "Google can kind of go and build data centers in congested tight land parcel areas, which are relatively very capex intensive, because it's partnered with a much more nimble firm."

Buying Intersect also enables Google to bypass the regulatory scrutiny that accompanies power purchase agreements with regulated utilities, especially around affordability issues, Houlihan Lokey's Mazzucchi added.

The "bring your own power" strategy additionally eliminates the interconnection queue bottlenecks and regulatory processes involved in buying front-of-the-meter power from public independent power producers.

Intersect, meanwhile, gains the creditworthiness and credibility of "a business that makes $100 billion in revenue that has been around for 20 years" Khorana said.

The direct cash infusion is also attractive.

"If anything, this emphasizes the quantum of capital needed by project developers, and the appeal of simply raising this with the hyperscalers rather than via infrastructure/public markets," analysts at Jefferies wrote Dec. 31, 2025.

Future transactions

Peter Gardett, CEO of market data platform Noreva, does not expect additional similar deals between IPPs and developers and tech giants.

"There's not a lot of 'mimic' deals to be done out there at this scale — any further developer plays by what we used to call tech companies are likely to be incremental and intended to fill in particular gaps in access to electrons — not a 'full stack' power asset developer solution," Gardett said in an email.

Minority investments with other platforms, on the other hand, "are really likely," Wood Mackenzie's Khorana said.

Still, whole company transactions may become appealing to neo-cloud companies entering the data center space.

"I do think if you've got enough cash, if you're sitting in [Crusoe Energy Systems LLC] or [Lambda Inc.]'s shoes or some other kind of major firm with billions in capital through public fundraising or otherwise, you could potentially roll up a bunch of power developers," Khorana said. "They can probably go buy multi-gigawatt pipelines and move that in-house, rather than paying a premium because eventually, that is really the playbook."

Aside from acquisitions, IPPs and renewables developers are finding new ways to partner with data center developers beyond traditional PPAs.

Google, for example, will pay for the recommissioning of NextEra's Duane Arnold Energy Center in Iowa in addition to purchasing the plant's output.

AES Corp. plans to build power generation as part of a development transfer agreement with an unnamed, large data center customer, and will still benefit from an ongoing PPA once the site is transferred.