Alphabet Secures $3 Billion Hydropower Deal with Brookfield for AI Data Centers

Alphabet has agreed to a $3 billion deal with Brookfield Asset Management for three gigawatts of hydropower to power its AI data centers. The deal includes a 20-year power purchase agreement and Alphabet's investment of $25 billion in data centers across the US. This is part of Alphabet's efforts to acquire clean energy to power its growing AI data centers. GOOGL stock has a Strong Buy rating with an average price target of $202.24, implying 10.62% upside from current levels.

Alphabet Inc. (GOOGL) has agreed to a $3 billion deal with Brookfield Asset Management (BAM) for 3 gigawatts (GW) of hydropower to support its growing AI data centers. The deal, announced on July 15, 2025, includes a 20-year power purchase agreement (PPA) and Alphabet's investment of $25 billion in data centers across the US [1][2].

Under the agreement, Alphabet will procure carbon-free electricity from Brookfield's Holtwood and Safe Harbor hydroelectric facilities in Pennsylvania, which together will provide 670 megawatts (MW) of capacity. The remaining 2.33 GW will be sourced from other hydroelectric assets that will be relicensed, overhauled, or upgraded to extend their useful life and continue adding power to the grid [1].

The deal is part of Alphabet's broader strategy to acquire clean energy to power its expanding AI data centers. The company aims to meet its operations with 24/7 carbon-free energy, and this agreement supports that goal [1].

Brookfield Asset Management, a leading global alternative asset manager, will maintain existing commitments to power consumers such as Amtrak from the Safe Harbor facility while delivering power to Alphabet. The transaction structure allows Brookfield to maintain these commitments [1].

Connor Teskey, President of Brookfield Asset Management, commented on the partnership, stating, "Our partnership with Google demonstrates the critical role that hydropower can play in helping hyperscale customers meet their energy goals" [1].

The deal is significant for both companies. For Alphabet, it ensures a steady supply of clean energy for its data centers, which are essential for its AI and machine learning operations. For Brookfield, it represents a substantial step forward in its strategy to deliver flexible, dispatchable clean energy solutions to the technology sector [1].

The stock market has responded positively to the news, with GOOGL stock receiving a Strong Buy rating with an average price target of $202.24, implying a 10.62% upside from current levels [2].

References:
[1] https://bam.brookfield.com/press-releases/brookfield-and-google-sign-hydro-framework-agreement-deliver-3000-mw-homegrown
[2] https://www.marketscreener.com/quote/stock/ALPHABET-INC-24203373/news/Brookfield-Asset-Management-Brookfield-Renewable-Google-Announce-Hydroelectric-Delivery-Agreement-50511449/