AI Wave Sparks Industrial Shift Toward Data Infrastructure
A growing number of American industrial firms are diving into the data center business, drawn by the sector’s explosive growth and surging infrastructure needs amid the AI boom.
Companies like Gates Industrial and Generac are rapidly expanding into this space, adapting their manufacturing lines to produce backup generators and specialized cooling systems for major tech players including Amazon, Alphabet, Microsoft, and Meta. Even Honeywell, traditionally associated with aerospace and home technologies, is pushing hybrid cooling products for data centers, with its CEO identifying the sector as a top priority during its latest earnings call.
The drive toward digital infrastructure is being fueled by surging demand for artificial intelligence, prompting massive investment. Microsoft alone has committed $80 billion to new data center capacity, while the Damac Group has unveiled a $20 billion plan for facilities across eight U.S. states. According to Gartner, data center infrastructure spending is expected to exceed $400 billion this year, with hyperscale providers responsible for over 75% of that total.
Vertiv, a supplier of cooling and power solutions, upgraded its 2024 sales forecast to 14% growth, while Morgan Stanley analyst Chris Snyder described the current environment as “supersonic,” noting that prices charged to data center clients are outpacing those in other sectors.
Generac is especially keen to regain lost ground after a steep drop in its share price since 2021. The company has poured over $130 million into production upgrades to meet hyperscaler demand. Gates, meanwhile, is repurposing its automotive expertise to deliver fluid control systems tailored for server cooling, signaling a full pivot into the high-growth sector.
While analysts remain cautious about predicting long-term valuation shifts for manufacturers entering the data center space, few expect any significant downturn in spending. As AI continues to accelerate demand for computing infrastructure, the industrial sector appears poised to benefit from a trend showing no signs of slowing down.
Alexander Zdravkov
Reporter at Coindoo
Alexander Zdravkov is a person who always looks for the logic behind things. He is fluent in German and has more than 3 years of experience in the crypto space, where he skillfully identifies new trends in the world of digital currencies. Whether providing in-depth analysis or daily reports on all topics, his deep understanding and enthusiasm for what he does make him a valuable member of the team.
