As Big Tech companies break spending records in the race to develop AI infrastructure, chip makers aren’t the only ones seeing business boom, according to a new Bank of America Global Research report.
Data center vendors in several industrial sectors, from energy management to construction manufacturing, are benefiting from the AI spending boom alongside computer equipment makers.
The global data center market is expected reach $939 billion in 2028, up from $406 billion last year, according to the report.
While most of that spending — up to 84% in 2028 — will go toward AI servers, rising demand for industrial equipment is poised to boost many other sectors outside of technology.
Aside from computers, data centers require a surprising amount of infrastructure to run efficiently, from thermal and cooling systems to backup power.
Data center infrastructure spending outside the IT category is expected to grow 19% annually in the next few years, reaching $147 billion in 2028.
Electrical and thermal equipment, both of which help regulate temperature inside data centers, are two of the biggest categories for data center infrastructure spending, according to Bank of America.
The electrical equipment market for data centers is dominated by a small group of industry incumbents, with leader Schneider Electric controlling 21% of the market. The French energy management company counts Google, Amazon, and Microsoft as customers, and announced a partnership with Nvidia earlier this year.
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Ohio-based Vertiv is the second-largest provider of electrical infrastructure to data centers. The company has reported strong demand for its liquid cooling technology, and its stock has climbed more than 50% in the last year.
Spending on liquid cooling technology and equipment is expected to grow 60% annually through 2028, faster than any other category of spending across all of data center infrastructure, including AI servers. Data center operators are increasingly turning to liquid cooling over air cooling for AI servers, according to Bank of America.
The liquid cooling market has seen multiple new entrants in recent years, including startups like JetCool. Bank of America estimates there are 30 vendors offering more than 100 variations of liquid cooling technologies, but that may not be enough to rattle incumbents like Vertiv. “Given the conservative nature of data center operators, we argue that reputation and service capability will play a major factor in decision-making,” the report said.
Generators are another big budget line item for data center operators. The report estimates that Caterpillar owns the largest share of the data center generator market — 42%. Cummins, which makes generator sets for commercial and industrial use, and engine manufacturer Rolls-Royce (not the BMW-owned automaker Rolls-Royce Motor Cars) are close behind at 24% and 21% respectively. Caterpillar’s share price hit an all-time high of $444.85 earlier this week.
Caterpillar, Cummins, and Rolls-Royce all make traditional diesel-powered generators, though the BofA report notes that data center operators are starting to use other kinds of generators as well.
Stargate developer Crusoe, for instance, has contracted nearly 1 gigawatt of natural gas turbine generators from GE Vernova for its data center in Abilene, Texas.
