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AI-driven demand doubles revenue from data centers for top European industrial companies to EUR20B
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Schneider Electric leads data center growth, with revenue up 17% from the secure power division.
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Power supply delay challenges AI’s impact on the expansion of data centers, despite increasing demand.
Bloomberg reports that artificial intelligence (AI), which is growing rapidly, is boosting revenue at some of Europe’s largest industrial companies. While the global manufacturing sector is weakening, especially in Asia and North America; companies like ABB Ltd., Siemens AG. Legrand SA. and Schneider Electric SE. are seeing a rise in orders for data centre infrastructure.
The six largest electrical companies have seen their data center revenue reach EUR20 billion ($22.2billion) in the last year. This figure shows a doubled revenue compared to the previous five years, indicating that the sector is on a strong growth path.
James Moore, an analyst at Redburn Atlantic, predicts that sales will continue to grow by around 15% per year through 2027. This growth isn’t limited to European firms. US companies such as Vertiv Holdings Company and Eaton Corp Plc also benefit from the AI-driven market.
Schneider Electric is particularly exposed to the data centers market. Schneider Electric’s secure-power division, which is responsible for the hardware and software used in data centers, generates 17% of its revenues from this market.
Schneider’s liquid-cooling technologies, which manage temperatures efficiently in high density data centers, have gained traction. Pankaj Sharma is the executive vice president for Schneider Electric’s Secure Power Division. He noted the alarming increase in demand for data centers infrastructure and compared it to previous technological booms such as e-commerce or Bitcoin mining.
Despite the excitement surrounding AI, there are still some challenges. Roland Busch, Siemens’ CEO, highlighted the continued growth in data processing requirements, which continues drive demand for electric vehicles.
Siemens says that despite this, the electrification industry is entering a supercycle, as power and data processing needs continue to grow. Companies closely linked to AI and data centres continue to grow and may convince investors that they can exceed cautious expectations for the years 2024 and 2025.
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