For decades, data centers have followed the fiber, clustering in hubs like Northern Virginia where network connectivity and tax incentives were abundant. Google’s new approach to building data centers is doing the opposite.
The company announced this week a strategic partnership with Intersect Power and TPG Rise Climate that will flip the typical model: build data centers where clean power is plentiful, and bring the fiber to them.
“AI data centers…will require load to relocate alongside generation,” wrote Intersect Power CEO Sheldon Kimber in a recent post. “In particular, locations with large amounts of high capacity factor, low-cost, clean electricity, such as the center of the country, will become ground zero for this reimagining of our energy infrastructure.”
The collaboration, which could drive $20 billion of investment to renewables and batteries by 2030, marks a significant shift in how large computing facilities may get developed in the AI age. Google explained that it will be able to “provide offtake as an anchor tenant in the co-located industrial park that would support data center development” when Intersect builds new clean energy projects.
Speaking at Latitude Media’s Transition-AI conference last week, Google’s global head of data center energy, Amanda Peterson Corio, teased the new development framework: “The scale of AI presents an opportunity to completely rethink data center development — by co-locating them where possible with the grid-connected carbon-free energy that keeps them up and running.”
“If you want speed, scale, certainty, and maximum percentage of clean energy, why not just go to the spots with vast amounts of land, wind, solar, natural gas, and the accompanying geologic formations?” Kimber asked. “It’s the obvious solution and likely the only one that can achieve the scale necessary to support AI.”
Under the new partnership with Intersect, Google and TPG Rise Climate will also invest $800 million in equity into the developer, signaling institutional investors’ growing interest in this emerging infrastructure class. The first projects are expected to begin operations in 2026.
Changing data center development norms
The flip makes sense because the economics of data center development have fundamentally changed, says Brian Janous, a veteran of Microsoft’s energy team who now leads Cloverleaf Infrastructure. A decade ago, developers could secure land near fiber networks and assume power would be available. The site selection process focused primarily on real estate, network connectivity, and tax incentives.
“In a world of relative power abundance, all you needed to do was get a piece of land,” Janous explained on a recent episode of the Catalyst podcast about how the energy-first development model is influencing the market. “You didn’t actually have to spend a whole lot of money to, in essence, pre-provision a data center that could be built, say in 18 months.”
But that model is breaking down as companies rush to build tens of gigawatts of new data centers to support AI training and inference — and creating capacity constraints around the country.
“Where we’re at today is in a world of constraint. It’s not just land. It is land plus a clear line of sight to power in that same sort of 18 to 24 month time horizon,” Janous said. “And if that necessitates the utility building, new generation, building new transmission, acquiring more substation capacity and transformers, the cost now goes up considerably.”
This shift requires rethinking how data centers get developed — and what power sources to prioritize.
As Kimber wrote, “the transition to ‘power first’ data center siting will likely result in the need for new network infrastructure, the establishment of clusters in new geographic hubs, training, labor force development, and new technology solutions for things like water and backup power.”
Intersect Power has long been preparing for this transition. The company has developed single projects capable of hosting loads as large as three gigawatts behind the meter, with several more projects ready to come online between 2026 and 2029.
Kimber believes renewables and batteries will be a core part of this strategy. While many are focused on nuclear or gas with CCS as solutions, he argues these are “some of the least scalable, longest-dated, and most regulatorily and environmentally challenging of all possible solutions.”
Exxon might disagree. The company said this week it plans to build behind-the-meter gas plants with carbon capture to support new data centers — the oil and gas company’s first time building a power plant that won’t supply its own operations.
