For AI, a few seconds of power becomes a booming business

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ABB, Schneider Electric and generator manufacturers Caterpillar and Cummins attribute rising electrical equipment sales to data centers’ expansion. Schneider last fall received a five-year, $3 billion contract from Dallas-based Compass Datacenters to provide prefabricated rooms with power management equipment that can be dropped into data centers under construction. Engine maker Cummins recently said it expects sales from its power-generation business to increase by 10% to 15% this year, up from its previously forecast 5% to 10% growth.

The company aims to expand production of 95-liter engines used for data-center generators. “We’re sold out on our 95-liter through 2025," Chief Executive Officer Jennifer Rumsey said. At rival engine maker Caterpillar, sales of diesel engines for power generation grew to $6.4 billion in 2023, a 29% increase from 2022, driven by data-center sales.

Sales of power-generating engines rose by another 26% during the first quarter of 2024. Caterpillar plans to invest $725 million in its Lafayette, Ind., plant to expand production of large engines used to generate electricity. “We see electric power as a growth business within Caterpillar.

A big driver of that is the data-center business," said Jason Kaiser, president of energy and transportation for the construction and mining-equipment company. Eaton reported recently that orders for data-center electrical gear have more than doubled over the past 12 months. “We are signing multiyear agreements with our customers to ensure that we have capacity in place to support the demand they need from us," CEO Craig Arnold told analysts on a conference call.