Google backs $800M funding round for clean energy startup Intersect Power to fuel sustainable AI data centers

The mainstream adoption of generative AI is driving a surge in demand for AI-focused data centers, pushing companies and investors to look for sustainable solutions. One of the key players in this space is Intersect Power, a clean energy startup that provides renewable power and storage solutions to new data centers.

Today, Intersect Power announced it has raised $800 million in new funding led by TPG and Google’s parent company Alphabet as part of a strategic partnership. Other investors including Climate Adaptive Infrastructure and Greenbelt Capital Partners also participated in this round.

As part of the partnership, Intersect Power will develop new clean energy facilities, with Google serving as an anchor tenant by sourcing energy for its data center campuses within co-located industrial parks. Upon completion, the Google data center and its corresponding clean energy source will become operational simultaneously, adding new generation capacity to the grid to meet the center’s energy requirements.

This move aligns with Google’s efforts, alongside other major tech players like Microsoft and Meta, to expand its data center capacity to handle the increased demand brought on by AI and cloud services.

Founded in 2016 by CEO Sheldon Kimber, Intersect Power provides scalable, low-carbon energy solutions. It is a portfolio company of TPG Rise Climate, a fund focused on addressing environmental challenges. The partnership goes beyond just financial backing. Google, TPG Rise Climate, and Intersect Power are collaborating to create industrial parks designed to co-locate gigawatts of data center capacity with clean energy facilities.

“This partnership is an evolution of the way hyperscalers and power providers have previously worked together. We can and are developing innovative solutions to expand data center capacity while reducing the strain on the grid,” Kimber said. “Deep, collaborative partnerships combined with creative problem-solving are the only way that we can meet the explosion of AI growth, as well as society’s accelerating electricity demand.”

By situating data centers near carbon-free power sources, Google hopes to alleviate the strain on power grids while speeding up the timelines for energy and data center projects, Reuters reported. This approach aims to address ongoing challenges faced by the U.S. electrical grid, which is struggling to meet the energy needs of emerging technologies like generative AI.

Google is set to be a primary user of the clean energy generated by Intersect Power’s new facilities. The company stated that its data centers will come online simultaneously with the clean energy projects, adding capacity to the grid and improving reliability.

“This means the Google data center would come online alongside its own clean power, bringing new generation capacity to the grid to meet our load, reduce time to operation, and improve grid reliability,” Google noted in a statement.

The first phase of this co-located project is expected to begin operations in 2026, with full completion slated for 2027. This investment highlights a significant step in aligning technological advancements with sustainable energy development.