Data Centre Market Poised for Growth Despite AI Advancements
The data centre market is expected to experience significant growth, driven by increasing demand for electrification products, according to ABB’s CEO, Morten Wierod. This comes despite the emergence of low-energy AI models from China’s DeepSeek, which has sparked concerns among investors.
ABB Sees Opportunity in Data Centre Growth
Wierod expressed confidence in the company’s ability to capitalize on the growing demand for data centre infrastructure, citing ABB’s strong track record in the market. The company’s data centre-related orders have increased by 23% per year on average from 2019 to 2023, with an even faster growth rate in 2024.
DeepSeek’s Impact on the Market
DeepSeek’s free AI assistant has overtaken OpenAI’s ChatGPT on Apple’s App Store in the United States, prompting concerns about the potential threat to advanced chipmakers like Nvidia. However, Wierod believes that DeepSeek’s popularity will not significantly impact ABB’s business, as its customers have already factored in the development of low-energy AI models into their capital expenditure plans.
ABB’s Competitive Advantage
ABB’s products, including motors and variable speed drives, are designed to reduce electricity consumption by up to 60%. Additionally, its uninterrupted power supply products boast an impressive 97.4% efficiency rate when converting electricity. This focus on energy efficiency positions ABB as a leader in the data centre market, particularly as companies seek to reduce their environmental footprint.
A Growing Market
The data centre market is expected to grow by nearly 12% per year, reaching $685 billion by 2032, according to Fortune Business Insights. ABB is well-positioned to benefit from this growth, with its electrification business already accounting for 15% of its total revenue.
China: A Key Market for ABB
Wierod sees significant potential for ABB in China, where the company is poised to capitalize on the growing demand for data centre infrastructure. With the Chinese government investing heavily in AI infrastructure, ABB is confident that its products will be in high demand.
A Bright Future Ahead
Despite the uncertainty surrounding the impact of low-energy AI models, Wierod remains optimistic about ABB’s prospects in the data centre market. With its focus on energy efficiency and its strong track record in the market, ABB is confident that it will continue to thrive in the coming years.
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