Google Partners with TPG Rise Climate to Fund Intersect Power

(Reuters) – Alphabet (NASDAQ: GOOGL)'s Google, alongside TPG Rise Climate and other investors, is backing clean energy developer Intersect Power in an over $800 million funding round, announced on Tuesday.

Google's investment comes as the tech giant, like other 'hyperscalers' including Microsoft (NASDAQ: MSFT) and Meta (NASDAQ: META), accelerates its domestic data center capacity to address the surge in AI-driven cloud demand.

The collaboration also aims to develop industrial parks that will house gigawatts of data center capacity, co-located with new clean energy plants.

By placing data centers adjacent to carbon-free energy sources, Google intends to alleviate power grid constraints and improve delivery timelines for power generation and data center projects.

U.S. electrical systems are currently struggling to meet the rapidly growing power needs of emerging technologies like Generative AI, which threatens to strain the vulnerable power grid.

Google will be a primary customer for the clean energy produced by Intersect Power's facilities, with new data centers utilizing this energy immediately.

Google stated, "This means the Google data center would come online alongside its own clean power, providing new generation capacity to the grid to meet our load, reduce time to operation, and improve grid reliability."

The initial phase of the first co-located project is anticipated to be operational by 2026, with full completion expected in 2027.

Founded in 2016, Intersect Power delivers scalable low-carbon solutions and is part of TPG Rise Climate, the climate-focused fund of private equity firm TPG.