For AI, seconds of power is a booming business.

The race to power new artificial intelligence models and keep internet and mobile services running 24 hours a day is a windfall for manufacturers of generators and battery systems essential to keeping power flowing during thunderstorms and grid failures. It brings great benefits.

Stream Data Centers' two computer server sites in suburban Chicago do not tolerate blips, sags, dips, or anything other than a smooth, continuous flow of electricity. The converted warehouse building houses thousands of servers backed up by banks of batteries and diesel generators.

“We are considered a mission-critical facility, and the customers we serve are very energy conscious,” said Stuart Lawrence, vice president of product innovation and sustainability at Stream Data. ” states.

The company acquired more than 50 nearby homes and businesses and demolished them to make way for a new three-building data center campus. Construction of the first building is scheduled to begin next year.

Data center developers are in the midst of a construction boom spurred by powerful new computer chips that are powering artificial intelligence-enabled products such as ChatGPT. These products sift through vast repositories of information and images to make decisions.

AI Server will add to the already robust fleet of cloud-based servers that allow consumers to remotely pay bills, buy clothes, send emails and stream their favorite TV shows on their computer screens. It is layered on top of the data center market.

Data center space in the U.S. will expand by 26% in 2023, with a record amount of data under construction, according to real estate firm CBRE. The price of available space continues to rise.

“I don't think the music is going to stop anytime soon,” said Nick Bustamante, chief technology officer at Corscale, a Houston-based data center developer and manager.

The typically stable market for equipping data centers with generators, batteries, transformers, and other electrical equipment has been significantly enhanced by expansions. Companies such as electronics manufacturers Eaton, ABB and Schneider Electric, and generator manufacturers Caterpillar and Cummins, attribute the increase in electronics sales to data center expansion.

Last fall, Mr. Schneider signed a five-year, $3 billion contract from Dallas-based Compass Data Centers to provide prefabricated rooms with power management equipment that could be installed in data centers under construction.

Engine maker Cummins recently announced that it expects revenue from its power generation business to increase 10% to 15% this year, up from previous expectations of 5% to 10%. The company aims to expand production of 95-liter engines used in data center generators.

“95 liters will be sold out until 2025,” CEO Jennifer Ramsey said.

At rival engine maker Caterpillar, sales of power generation diesel engines rose 29% from 2022 to $6.4 billion in 2023, driven by data center sales. Sales of power generation engines increased by a further 26% in the first quarter of 2024.

Caterpillar plans to invest $725 million in its Lafayette, Indiana, plant to expand production of large engines for power generation.

“Inside Caterpillar, we believe power is a growth business, and a big driver of that is our data center business,” said Jason Kaiser, president of energy and transportation for the construction and mining equipment company. Ta.

Eaton recently reported that orders for data center electrical equipment have more than doubled in the past 12 months. “We have multi-year agreements with our customers to ensure we are positioned to support the demands they require,” CEO Craig Arnold told analysts on a conference call. said.

Backup power, air cooling, power distribution equipment and other building systems account for half of a data center's construction cost, typically ranging from $500 million to $1 billion each, developers say. Large diesel generators cost him as much as $1.5 million each, and it can take him up to two years to get them from manufacturers.

“The challenge is to make power available. There should be no downtime or power outages,” said Natalie Silva, Key Power and Sustainability Leader at ABB.

Development company CloudHQ has installed more than 300 Caterpillar generators in seven data centers it operates in Northern Virginia (the nation's data center hub), with two more sites in development.

In most parts of the country, generator and battery backup obligations are sparse. At CloudHQ's Virginia data center, generators are turned on once or twice a year in response to a complete power outage, typically running for 1 to 2 minutes before normal power service is restored.

CloudHQ's data centers are powered by their own substations connected to power lines, which reduces the chance of long-term outages caused by storms that other businesses and homes may experience, the company said. President Brian O'Hara said.

At one of Stream Data's suburban Chicago data centers, more than 20 generators manufactured by Cummins stand by, providing the 32 megawatts of power needed to maintain the center's servers and other systems.

The data center has four separate halls lined with metal racks that house computer servers. New, more powerful computer chips and increased density of servers mean that each square foot of data centers requires about twice as much power as it did a decade ago.

If the center loses power, the servers provide instant power from a bank of lithium-ion batteries dedicated to each server hall in the building. The center's uninterruptible power supply ensures that there is no complete loss of power and smooths out temporary dips and other anomalies that periodically occur in the power provided by the utility company.

“Servers are becoming less and less tolerant of small power sags and brownouts,” said Adam Compton, head of data center strategy at Schneider Electric, a supplier of uninterruptible power systems for Stream Data. I am.