Google buys Intersect for $4.75 billion to tackle energy constraints

"With the acquisition of the company, which focuses on data center and energy infrastructure, Alphabet is strengthening its position at a time when demand for computing power and electricity is rapidly increasing. According to CNBC, the acquisition is part of the increasing competition surrounding artificial intelligence. Google is under pressure from rivals such as OpenAI, which accelerated the generative AI market with the introduction of ChatGPT in 2022."

"Google already had a minority stake in Intersect after a financing round announced last year. At that time, Intersect spoke of ambitious plans to develop several gigawatts of data center capacity in the United States in collaboration with Google and investor TPG Rise Climate. This also included an investment of approximately $20 billion in renewable energy infrastructure by the end of this decade. That earlier collaboration forms the basis for the full acquisition by Alphabet."

"The transaction includes the Intersect team and a series of energy and data center projects that are in development or under construction. An important part of this is the concept of colocation, whereby data centers and energy generation are realized at a single location. Alphabet expects this approach to enable new capacity to be brought online faster and better aligned with actual demand, without passing on additional costs to other users of the electricity grid."

Alphabet is acquiring Intersect for $4.75 billion in cash, with the assumption of debt, to bolster data center and energy infrastructure as computing and electricity demand rises. The acquisition responds to intensifying competition in artificial intelligence and rivals' large infrastructure commitments. Google previously held a minority stake after a financing round that outlined plans for several gigawatts of capacity in partnership with Google and TPG Rise Climate, and about $20 billion in renewable energy investments by the end of the decade. The deal includes Intersect's team and projects, emphasizes colocated data center and energy generation to accelerate capacity online and limit grid cost impacts, and leaves Intersect operating independently with founder and CEO Sheldon Kimber remaining in place.

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