Bypassing the power grid queue! Why is Google leading in the data center race?

As the competition in artificial intelligence shifts from a pure algorithm model contest to a battle for physical infrastructure, tech giants are sparing no expense to secure energy supplies through mergers and vertical integration. In the context of increasingly scarce electricity supply, "speed" and "grid access rights" have become key assets determining victory or defeat.

Recently, Google spent $4.75 billion to acquire renewable energy developer Intersect Power. The core logic behind this move is to bypass the lengthy queue for grid connections. Through this transaction, Google directly obtains the grid connection permits, key equipment orders, and a development pipeline of up to 8 to 10 gigawatts (GW) that Intersect has secured, enabling it to obtain large-scale electricity supplies faster than its competitors. In contrast, while competitors like Amazon are also making arrangements, Google has clearly gained a time advantage by paying a premium in terms of cost per kilowatt and construction speed.

Meanwhile, Elon Musk's xAI is also showcasing its extreme engineering speed. On January 17, 2026, Eastern Time, Musk announced that the world's first AI training cluster with a single computing power reaching the gigawatt level, Colossus 2, has officially gone into operation. The project was completed and put into production in less than a year, with plans to further upgrade to 1.5 GW this April. This speed far exceeds the planned roadmaps of competitors like Anthropic and OpenAI, marking the formal entry of AI training into the industrial-grade computing era.

This series of dynamics indicates that the scarcity of power infrastructure is reshaping the valuation system and competitive landscape of data centers. Whether it is Google's high-premium acquisition or xAI's "lightning war" construction, both highlight that in the current situation of grid congestion and equipment shortages, having controllable power and land resources has become the core moat for tech giants.

Paying the "Fast Lane" Premium: Google's Strategic Logic

Google's acquisition of Intersect is not just an energy investment, but a buyout of supply chain priority. According to Bloomberg, Amazon recently acquired a bankrupt 1.2 GW solar project for $83 million, while Google's cost per gigawatt in the Intersect deal is about six times that of Amazon. This enormous premium reflects Google's desire for speed: The top-tier grid connection permits and regulatory approvals that Intersect possesses allow its projects to be ready by around 2028, while ordinary projects typically face years of waiting.

More critically, Intersect occupies a favorable position in the supply chain. In Memphis, Tennessee, at a factory operated by South Korea's Hyosung HICO, giant transformers reserved by Intersect are currently in production. This type of key equipment currently faces delivery cycles of up to four years, while Intersect has secured production capacity through long-term partnerships. Intersect's CEO Sheldon Kimber likens this capability to "not just selling coffee beans, but selling high-priced lattes," implying that the mature project assets it holds are more valuable than mere electricity development. Amanda Peterson Corio, head of energy for Google's data centers, stated that this deal will bring new generation capacity to the grid, rather than just consuming existing resources. This "self-sufficient" model—where data centers produce their own power and feed it back to the grid—is seen by Google as the "ticket to entry."

Texas: The "Disneyland of Energy"

Geographically, Google and Intersect have set their sights on the narrow strip of Texas. This area not only has abundant wind and solar resources but, more importantly, Texas has a unique and relatively independent free market grid (ERCOT). Intersect CEO Kimberg referred to Texas as the "Disneyland of Energy," believing it to be an ideal place for rapid deployment and cost-effectiveness.

Intersect has reserved a large amount of land in places like Hereford, Texas, and designed a hybrid energy model: utilizing wind, solar, and battery backup to provide most of the power, while using on-site small gas turbines as "regulating power sources." This model allows renewable energy to account for up to 70%, while accessing underground natural gas pipelines avoids the 5 to 7-year wait for large gas turbine deliveries.

This strategy enables Google to escape the challenges of building power plants in the heavily regulated Northeast U.S., as Ann Davis Vaughan pointed out, when President Trump attempted to restart power plants in other regions, the free market mechanism in Texas has allowed data centers to grow rapidly in a "petri dish" environment.

xAI's "Blitzkrieg": Vertical Integration of Industrial-Grade Computing Power

While Google accelerates through acquisitions, Musk has demonstrated remarkable execution through vertical integration. The launch of Colossus 2 means that xAI has transformed a piece of land into a supercomputing cluster with energy consumption exceeding that of San Francisco's peak electricity usage in less than a year.

According to SemiAnalysis, xAI's computing power scale curve has shown a steep rise, while its competitors' plans of similar scale remain at 2027. Musk revealed that the cluster will expand to 1.5GW in April and boldly claimed that within five years, xAI's computing power will surpass that of all other companies combined. xAI has adopted a strategy of building its own infrastructure from scratch to accommodate computing loads, rather than relying on cloud service providers like Microsoft Azure or Amazon AWS.

This aggressive expansion of "getting on the bus first and buying a ticket later" also comes with regulatory risks. The U.S. Environmental Protection Agency (EPA) pointed out that xAI is using natural gas turbines to generate electricity at its Memphis base to fill power gaps, with some equipment allegedly operating without permits. This highlights the tension between pursuing extreme speed and meeting compliance.

Market Game: Controversies from Water Resources to Nuclear Energy

As the competition for resources among data centers intensifies, its impact on the environment and public resources has also drawn widespread attention. Data from SemiAnalysis shows that while Colossus 2 consumes a significant amount of water, it is only equivalent to the consumption of 2.5 In-N-Out burger locations, which is lower than public expectations Other giants are also seeking solutions. Microsoft is collaborating with the Midcontinent Independent System Operator (MISO) to optimize grid management using AI. Meanwhile, Meta Platforms' deal to purchase existing nuclear power capacity in Ohio has drawn criticism from Princeton University energy expert Jesse Jenkins, who believes this move is "eating away" at public resources and driving up electricity prices, rather than increasing new clean energy supply. Notably, Google is one of the funders of Jenkins' research.

Overall, whether it is Google's capital operations or Musk's engineering marvels, they point to the same fact: in the AI era, whoever can solve the physical bottleneck of electricity the fastest will dominate computing power.