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Delta Electronics Warns AI Boom Is Driving Costs Higher

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Taiwan’s Delta Electronics, a major supplier of power and cooling systems for AI data centres, has warned that surging artificial intelligence infrastructure demand is pushing operating costs higher. The company expects rising oil prices, material shortages, and broader inflation linked to AI expansion to increase pressure in the coming quarters.

Delta, whose customers include Nvidia, Google, and Meta, said production capacity remains tight as global AI datacentre construction accelerates. To meet demand, the company is expanding operations across China, Thailand, the United States, and Taiwan.

The firm previously announced capital expenditure of T$46.1 billion ($1.46 billion) in 2025 and now says spending will rise even further this year. This reflects how critical energy management, cooling systems, and infrastructure have become as hyperscale cloud providers and AI companies scale hardware deployments.

Despite cost concerns, Delta posted strong first-quarter results. Revenue climbed 34% year-over-year to T$159.35 billion ($5.02 billion), while gross profit surged 56% to T$59 billion ($1.86 billion), largely fueled by AI datacentre growth.

Delta Electronics’ stock has risen nearly 125% this year, significantly outperforming Taiwan’s broader market. The company’s outlook suggests that while AI remains a massive growth driver, supply chain constraints and inflation may increasingly shape profitability across the sector.

UBS: AI Data Centres to Power Global Energy Storage Boom Over Next Five Years

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The surge in AI data centre power demand across the United States is set to trigger a “boom cycle” for energy storage over the next five years, according to a new report from UBS Securities.

UBS analyst Yan Yishu, speaking at a media briefing in Hong Kong, said global energy storage demand could grow 40% year-on-year in 2026, as the U.S. grid increasingly depends on batteries to manage fluctuations from wind and solar power.

“The demand for AI data centres in the U.S. is very robust, but electricity is the biggest bottleneck,” Yan said. As renewables remain the only U.S. power segment expected to expand significantly in the coming years, large-scale energy storage systems will be critical to balancing intermittent supply with rising consumption.

The U.S. remains a key market for Chinese energy storage firms, which hold about 20% market share there, drawn by high profit margins. However, Yan warned that President Trump’s One Big Beautiful Bill, which restricts Chinese participation in U.S. energy infrastructure, could pose serious risks to future exports.

Meanwhile, emerging markets including the Middle East, Latin America, Africa, and Southeast Asia are expected to record 30–50% growth rates or higher as renewable integration accelerates.

In China, policy reforms encouraging market-based electricity pricing are also driving new storage investments. Yan noted that a peak-to-valley price gap of 0.4 yuan ($0.06) per kWh is already enough to make standalone storage projects profitable. UBS expects provincial governments to introduce capacity payments, rewarding battery operators for availability during peak demand, further fueling growth.

AI-driven data centre boom boosts ABB’s U.S. sales and orders

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Swiss engineering giant ABB reported a strong third quarter as surging investment in data centres across the United States drives demand for its industrial robots, electrification products, and power solutions.

The company said new U.S. orders rose 27% in the third quarter, powered largely by the expansion of data centres needed to process artificial intelligence workloads. “It’s the normal standard business where there is strong demand,” said CEO Morten Wierod, noting the rise was not linked to U.S. import tariffs.

ABB generates about 7% of its revenue from data centres, up from 6% a year ago, and provides uninterruptible power supplies and electrification systems that keep critical servers online. Wierod said the AI boom is also driving broader electrification, forcing utilities and industrial sectors to increase investments.

Earlier this week, ABB announced a partnership with Nvidia to develop advanced infrastructure for next-generation data centres.

The company posted a 12% rise in operating EBITA to $1.74 billion, topping forecasts, while revenue grew 11% to $9.08 billion. Orders also climbed 12%. ABB’s shares initially rose 2.5% after the results before easing later in the session.

Chief Financial Officer Timo Ihamuotila, who will step down next year, said U.S. tariffs have had only a limited impact, costing “tens of millions” of dollars in profit, which the company has offset with price adjustments and efficiency gains. ABB currently manufactures about 75–80% of its U.S. products domestically, with plans to raise that to 90% through new factory investments.