4 of Europe’s oldest industrial teams have added greater than €150bn to their market caps on the again of hovering demand for knowledge centres pushed by the growth in synthetic intelligence.
European makers of every thing from switches to good meters are offering the servers and infrastructure that energy knowledge centres for giant language fashions and cloud computing, with conventional makers of electrical gear reminiscent of Legrand doubling their revenues because of knowledge centres in recent times.
“We’re not placing $70 or $80bn on the desk like Microsoft and Meta,” mentioned Franck Lemery, chief monetary officer of Legrand. “[But] we [provide] the parts and our enterprise is rising relative to that [spending].”
“The horny a part of AI is led by American corporations,” mentioned Alex Cordovil, an analyst at Dell’Oro. “However, with some exceptions, the nuts and bolts of the infrastructure are dominated by European gamers.”
Traders have noticed the potential. For the reason that launch of ChatGPT in November 2022, the market valuations of Schneider Electrical, Siemens AG, ABB and Legrand — 4 of the main European teams within the sector — have grown a mixed €151bn, rising greater than 60 per cent within the case of German-listed Siemens AG.
The teams proceed to offer electrics to residential buildings and industrial teams. However knowledge centres are their fastest-growing income, pushed by the quantity of computing energy required by AI fashions, in addition to gaming, cloud computing and streaming.
That focus has additionally uncovered them to giant share worth swings, together with throughout a market rout earlier this yr triggered by the launch of Chinese language giant language mannequin DeepSeek, which its makers say was developed with much less processing energy. Traders are additionally involved concerning the constraints on grid methods and energy provides, in accordance with Cordovil.
However teams together with Legrand have disregarded issues, pointing to the long-term development of upper demand for knowledge processing — Dell’Oro expects whole capital expenditure on knowledge centres to extend from virtually $600bn in 2025 to greater than $1tn by 2028.
“All of the turbulence is relative. We’re very, very assured concerning the promise of our portfolio,” added Lemery. “We now have to reside with these ups and downs.”
Schneider Electrical
Schneider Electrical has been a number one supplier within the knowledge centre sector because the $6.1bn acquisition of American Energy Conversion in 2006, placing it in pole place to learn from hovering demand for electrical energy.
Knowledge centres accounted for about 24 per cent of its orders in 2024, a rise from 23 per cent in 2023 and 19 per cent in 2022, in accordance with the corporate.
The APC deal was initially judged costly by traders however it enabled the group to maneuver into the marketplace for crucial energy providers, which incorporates mills wanted to make sure uninterrupted energy provides to knowledge centres.
Schneider is valued at €127.9bn, overtaking French oil main TotalEnergies final yr in an indication of the world’s shift from fossil fuels to electrical energy.
The corporate vary from software program to observe knowledge centre infrastructure, racks to retailer servers and cooling methods to stop high-powered processing services from overheating. Final yr, it acquired a 75 per cent controlling curiosity in Motivair, a specialist in liquid cooling, for $850mn.
This could assist it serve clients reminiscent of Nvidia, whose servers for its strongest AI chips would require the extra environment friendly water cooling course of moderately than air, mentioned Schneider chief government Olivier Blum on the firm’s annual common assembly.
AI had turn out to be a “basic change of paradigm for the IT and electrical infrastructure required”, he added.
Legrand
Like Schneider and Siemens, French maker of sockets and cables Legrand dates again to the nineteenth century. Within the 1900s, it began making gentle switches from porcelain and wooden merchandise, then the best-known insulators of electrical currents.
Nonetheless primarily based in its historic headquarters of Limoges, Legrand has in recent times pivoted in the direction of knowledge centres, orders for which made up 20 per cent of gross sales in 2024, double the speed in 2019.
“It may symbolize extra, by 2030, between 20 and 25 per cent, we’ve not given a correct goal. We’re very assured that it’s a vertical that’s . . . going to proceed to develop strongly within the subsequent few years,” mentioned Lemery.
The group has made 10 small acquisitions up to now yr, six of which have been within the space of information centres.
However Legrand, like its industrial rivals, operates an export mannequin with a excessive variety of US shoppers that has left it uncovered to Trump’s tariffs. This month, chief government Benoît Coquart mentioned 50-60 per cent US tariffs on Chinese language items may value the corporate as much as $200mn this yr.
ABB
Swedish-Swiss electrical firm ABB makes every thing from robotics to energy mills however in recent times its gross sales have skewed in the direction of knowledge centres.
Morten Wierod, the corporate’s chief government, mentioned that ABB was “working with most of the world’s largest knowledge centre operators to make sure they’ve protected, dependable and vitality environment friendly applied sciences to handle their rising vitality wants”.
In 2024, knowledge centre orders made up 15 per cent of the $16.4bn in orders in ABB’s electrification unit, in contrast with about 9 per cent two years earlier. Electrification represents almost half of ABB’s $33bn in annual income. Between 2019 and 2023, knowledge centre orders grew at a mean annual price of 24 per cent, accelerating additional up to now yr because the AI race has intensified.
ABB’s choices for knowledge centre operators embrace guaranteeing availability and rising vitality effectivity in addition to appearing like backup batteries for total services. Its methods offering dependable energy are greener than conventional diesel mills, the corporate says.
However the firm’s publicity to hyperscalers has led to inventory market fluctuations, together with after stories that Microsoft had cancelled some leasing contracts. The US is its largest market when it comes to income for electrification, at about 50 per cent.
Siemens AG
German conglomerate Siemens has a smaller deal with knowledge centres however it has elevated spending on infrastructure for the know-how because it seeks to compensate for rivals like Schneider Electrical.
“Siemens and ABB have been centered on different areas and now they’re bringing their capabilities to bear over the previous three years,” mentioned William Mackie, an analyst at Kepler Cheuvreux.
The corporate’s general knowledge centre enterprise, which has fuelled the German producer’s current development, rose greater than 45 per cent to about €1.3bn within the first half of the fiscal yr.
However the Munich-based firm has seen some hurdles to this development, blaming a pause in knowledge centre orders from one “hyperscaler buyer” for a 16 per cent discount in orders on electrical merchandise reminiscent of microgrid controllers.
