TL;DR
Alphabet has agreed to acquire energy and infrastructure company Intersect for $4.75 billion in cash plus assumed debt, gaining access to multiple gigawatts of power resources and datacenter projects. Separately, reports say xAI is preparing another site that could push its training capacity toward 2 GW; that expansion was reported by Elon Musk but not independently confirmed in the source.
What happened
Alphabet announced a definitive agreement to acquire Intersect for $4.75 billion in cash, with the deal also including the assumption of Intersect's outstanding debts. Google already held a minority stake in Intersect from an earlier investment. The acquisition is intended to give Google access to Intersect's energy resources, described in the source as multiple gigawatts, and to datacenter projects currently under development. Intersect will continue operating under its existing brand and management, led by CEO Sheldon Kimber. Not all of Intersect's assets are included in the part of the transaction going to Alphabet: assets located in Texas and California will be taken over by existing investors and run as a separate company that plans to keep building new projects, including what Kimber described as the world's largest battery energy storage system. Separately, Elon Musk said on X that xAI has acquired a building that could expand its training compute toward almost 2 GW capacity; reports place the facility in Southaven, Mississippi, near xAI’s Tennessee site, and the publication says it requested confirmation from xAI.
Why it matters
- Securing dedicated power and energy infrastructure is becoming a strategic priority for companies running large-scale AI workloads.
- Owning or controlling gigawatts of generation and storage can help hyperscalers match datacenter build-out to power availability.
- The deal underscores increasing vertical integration between cloud/AI firms and the energy sector, with implications for grid planning and investment.
- Industry investors and analysts are watching whether these moves translate into sustainable revenue and whether broader AI spending will meet current expectations.
Key facts
- Alphabet will acquire Intersect for $4.75 billion in cash plus assumption of Intersect’s debts.
- Google previously held a minority stake in Intersect from an earlier funding round.
- Intersect is said to provide 'multiple gigawatts' of energy resources and has datacenter projects under development.
- Intersect will remain a separate brand and continue to be led by CEO Sheldon Kimber.
- Assets in Texas and California are to be acquired by existing investors and operated as a separate company.
- The separate investor-owned company will continue building new assets, including what Kimber called the world's largest battery energy storage system (BESS).
- Google and Intersect said the deal should allow expansion of datacenter capacity and new power generation without, they contend, passing costs to grid customers.
- Elon Musk posted that xAI acquired a building that could expand its training compute to almost 2 GW; reports place that site at Southaven, Mississippi, near Memphis.
- The publication asked xAI for confirmation of the reported facility and expansion plans.
What to watch next
- Whether regulators or other authorities impose conditions or review the Intersect acquisition (not confirmed in the source).
- How the asset split — with Texas and California holdings staying with existing investors — will affect Intersect's project pipeline and timelines (not confirmed in the source).
- Whether xAI formally confirms the reported Southaven site and provides details on expected build-out and timing (not confirmed in the source).
Quick glossary
- Datacenter: A facility that houses servers and networking equipment to store, process, and distribute large amounts of data.
- Gigawatt (GW): A unit of power equal to one billion watts, commonly used to express large-scale electricity generation or demand.
- Battery Energy Storage System (BESS): A system of batteries and associated controls that stores electrical energy for later use to balance supply and demand on the grid.
- GPU: A graphics processing unit, hardware commonly used for AI model training and other high-performance compute tasks.
Reader FAQ
Will Intersect remain independent after the acquisition?
Yes. According to the source, Intersect will keep its brand and remain led by CEO Sheldon Kimber.
Does Alphabet acquire all of Intersect’s assets?
No. The source reports that assets in Texas and California will be taken over by existing investors and run as a separate company.
Has xAI confirmed its reported expansion to almost 2 GW?
Not confirmed in the source.
Will customers see higher grid costs because of this deal?
Google and Intersect said the arrangement would expand capacity without, they claim, passing costs to grid customers.
SYSTEMS Google snaps up datacenter power biz Intersect while xAI plans more capacity The AI era needs more juice Dan Robinson Fri 2 Jan 2026 // 16:45 UTC The AI-fueled datacenter boom continues apace,…
Sources
- Google snaps up datacenter power biz Intersect while xAI plans more capacity
- Alphabet to acquire data center and energy infrastructure …
- Alphabet to buy clean energy developer Intersect in $4.75 …
- Google To Buy Data Center Firm Intersect For $4.7B To ' …
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