AI Agent UpdateThe power scramble: Google buys an energy developer, Microsoft signs 1,100 MW
Alphabet is buying an energy developer outright for $4.75B. Microsoft is signing 1,100 MW for twenty years and funding the grid upgrades itself. Anthropic is leasing wind power in Nova Scotia. The AI race is now, officially, an electricity race.
The News
Alphabet agreed to acquire data center and energy developer Intersect Power's in-development and under-construction portfolio — “several gigawatts” of energy and datacenter projects — for $4.75 billion. The structure is the point: new generation built in lockstep with datacenter load, rather than datacenters hoping the grid catches up.
Separately, Microsoft signed a 20-year, roughly 1,100 MW power deal with NiSource for an Indiana data-center campus, announced Oct 16 with service from 2028. Microsoft is fully funding the generation and transmission, plus 600 MW of battery storage via an AGP Group affiliate.
The NiSource terms show how badly hyperscalers want this done: the utility raised projected customer savings to about $1.75 billion over the contract's life — existing ratepayers are protected, even subsidised, by the deal structure — and NiSource shares rose about 3% on Friday.
Also this week, Anthropic signed a 20-year lease with EverWind for a 95 MW first phase at Point Tupper, Nova Scotia, going live in late 2027. It is the first tranche of a C$10 billion-plus campus-plus-wind plan targeting 420 MW by 2028 — billed as the largest private investment in Nova Scotia's history.
The hyperscalers aren't just buying compute anymore — they're buying electrons, twenty years at a time, and funding the wires to get them.
Why It Matters
Power is now the binding constraint on AI growth — not chips, not capital. TSMC can sell every accelerator the hyperscalers want; what's scarce is energised land with a grid connection this decade. These three deals are three versions of the same answer: stop queuing for power and start owning the supply chain that produces it.
For investors, the second-order winners keep compounding: utilities with hyperscaler counterparties (NiSource rose ~3% on the news), storage developers, and anyone holding permitted, powered land. The hyperscalers' willingness to fully fund transmission — historically the utility's problem — tells you the queue is worth billions to skip.
Analyst's Take
The hyperscalers are no longer just buying compute — they're buying electrons, twenty years at a time, and fully funding the wires to get them. Whoever controls the power contract controls the datacenter pipeline, which is why the grid bottleneck — see Nscale's abandoned UK mega-site in today's datacenter post — is now the number-one constraint on AI capex.
Read the Intersect deal as the template: generation and load under one owner, permitted as one project, financed off one balance sheet. Expect more outright acquisitions of developers by platforms, and expect the premium on powered land to keep detaching from the price of ordinary real estate. What to watch: interconnection-queue reform in the US, and whether any hyperscaler starts buying generation fleets outright rather than contracting around them.
By The Numbers
FAQ
Why did Google buy Intersect Power?
To secure generation alongside datacenter capacity. The $4.75B deal covers Intersect's in-development and under-construction portfolio — several gigawatts of energy and datacenter projects — with new generation built in lockstep with datacenter load, removing grid-queue risk from Alphabet's expansion.
What is Microsoft's Indiana power deal?
A 20-year agreement with NiSource for roughly 1,100 MW serving an Indiana data-center campus, from 2028. Microsoft fully funds generation and transmission, plus 600 MW of battery storage via an AGP Group affiliate; NiSource projects ~$1.75B in customer savings over the contract.
What is Anthropic building in Nova Scotia?
A data center campus at Point Tupper powered by EverWind — a 20-year lease starting with 95 MW in late 2027, part of a C$10B+ plan targeting 420 MW by 2028, described as the largest private investment in Nova Scotia's history.
Why is power the bottleneck for AI?
Datacenters can be built faster than grids can connect them. With interconnection queues stretching years, secured power — not GPUs — now gates how fast AI capacity can come online, which is why hyperscalers are signing 20-year deals and buying developers.
Source: Data Center Dynamics · TradingView · Reuters