Google is taking a significant step towards powering its artificial intelligence (AI) ambitions with a massive investment in renewable energy. The tech giant has announced a deal with renewable developer Intersect Power and investment fund TPG Rise Climate to build gigawatts of carbon-free power, battery storage, and grid upgrades to support its data centers.

The investment, valued at around $20 billion, marks a significant shift in Google's energy strategy, which has so far been focused on nuclear power. The company's AI ambitions have led to a rapid expansion of its data center infrastructure, with experts predicting that new AI data centers might be underpowered by 2027. This has forced tech companies like Google to invest in new sources of energy to support their growing AI capabilities.

The partnership with Intersect Power and TPG Rise Climate will involve the development of wind, solar, and battery storage projects, with the goal of creating a sustainable energy ecosystem to power Google's data centers. The first project, which is already being financed by Intersect, is expected to be operational by 2026, with the entire project completed by 2027. This rapid deployment is a testament to the speed at which renewable energy can be developed and deployed.

The deal also includes an $800 million equity investment in Intersect Power, with TPG leading the round and CAI, Google, and Greenbelt Capital Partners participating. This investment will help to accelerate the development of renewable energy projects, which are critical to supporting the growth of AI-driven data centers.

One of the key challenges facing the development of renewable energy projects is the connection to the grid. There are currently over 11,860 active requests from power producers waiting to connect to the grid in the US, with a total capacity of 2.05 terawatts. Google's deal with Intersect Power addresses this challenge by including provisions for grid upgrades, which will be funded by Google.

The implications of this deal are significant, not only for Google but also for the broader tech industry. As AI capabilities continue to grow, the demand for sustainable energy sources will increase, driving innovation and investment in renewable energy. This deal also puts pressure on nuclear power startups and developers, which have longer timelines and are struggling to keep up with the pace of renewable energy development.

Google's partnership with Intersect Power and TPG Rise Climate is a significant step towards creating a sustainable energy ecosystem to support its AI ambitions. As the tech industry continues to evolve, it's clear that renewable energy will play an increasingly important role in powering the growth of AI-driven data centers.