Alphabet said on Monday it would buy clean energy developer Intersect for $4.75 billion in cash, plus assumed debt, as tech giants spend billions to expand the computing and power capacity necessary for developing artificial intelligence.

Big Tech has ramped up investments in energy firms as U.S. power grids struggle to keep pace with the soaring electricity demand of generative AI amid an intensifying race to capitalize on the booming technology.

Under the deal, the Google parent will acquire Intersect's energy and data center projects in development or under construction.

The company has $15 billion of assets either operating or under construction. By 2028, Intersect projects representing about 10.8 gigawatts of power are expected to be online or in development. This is more than 20 times the electricity produced by the Hoover Dam.

The acquisition adds to a string of Alphabet's investments and partnerships in the energy space. Earlier this month, utility company NextEra NEE.N expanded its partnership with Google Cloud to build new energy supplies for the company's operations across the U.S.

DEAL TERMS

Google, along with TPG Rise Climate, backed Intersect as part of a more than $800 million funding round in December last year. That announcement also included plans to develop industrial parks for housing gigawatts of data center capacity co-located with new clean energy plants.

Intersect's operations will remain separate from Alphabet. The company's existing operating assets in Texas and its operating and in-development assets in California will not be part of the acquisition and will operate as an independent company, supported by existing investors, Alphabet said.

Its Texas projects include Quantum, a clean energy storage system being built directly alongside a data center campus for Google.

Intersect will also explore a range of emerging technologies to increase and diversify energy supply, while supporting Google's U.S. data center investments, Alphabet said.