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- Schneider signs two deals with US data centre operators
- New agreements expected to generate nearly $2.3 billion in sales
- Company says its solution can scale AI capacity without raising power demand
Nov 19 (Reuters) – Schneider Electric (SCHN.PA) said on Wednesday that it had signed new deals worth almost $2.3 billion with two U.S. data centre operators, as surging adoption of artificial intelligence boosts infrastructure demand.
At an industry event in Las Vegas, the French industrial group announced a $1.9 billion partnership with privately held tech firm Switch, covering power modules and cooling systems.
The second agreement, valued at $373 million and involving uninterruptible power supplies and switchgear, was signed with Texas-based Digital Realty (DLR.N).
The two contracts are a phased delivery of 2025 and 2026, a Schneider spokesperson said.
Schneider, France’s biggest energy company by market value, has emerged as a key data centre supplier, making server racks, cooling and power equipment that form the backbone of AI infrastructure.
It is also working with chipmaker Nvidia (NVDA.O) to design cooling systems for its most powerful AI chips.
Large-scale cloud service providers, also known as hyperscalers, are racing to build AI infrastructure. Amazon, Meta, Google and Microsoft are projected to spend more than $360 billion in 2025, according to company filings.
AI RAMPS UP PRESSURE ON US ENERGY GRID
The deal with Switch is Schneider’s largest cooling services agreement for data centres in North America to date. Schneider said the solution it is supplying should help scale AI capacity without proportionally increasing energy demand.
“Current data centre infrastructure wasn’t built to meet the demands of AI,” said Vandana Singh, senior vice president at Schneider’s North American secure power division.
U.S. utilities are struggling to keep pace with Big Tech’s power-hungry AI data centres.
Analysts from Morgan Stanley have estimated that global power demand from data centres will nearly triple in the next three years, intensifying the strain on already stretched U.S. power grids.
The data centre business accounts for nearly a quarter of Schneider’s total revenue. Financial analysts are expecting it to unveil targets tied to AI development during its capital markets day in London on December 11.
Reporting by Gianluca Lo Nostro in Gdansk; Editing by Milla Nissi-Prussak and Matt Scuffham
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