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ABB Confident in Data Center Growth Despite DeepSeek’s Energy-Efficient AI

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ABB CEO Morten Wierod expressed confidence in the continued growth of the data center market, despite concerns over the impact of DeepSeek’s low-energy AI models. Speaking on Thursday after ABB reported its fourth-quarter results, Wierod reassured investors that demand for the company’s electrification products remains strong.

DeepSeek, a Chinese AI startup offering a more energy-efficient alternative to U.S. rivals, caused a selloff in tech stocks earlier in the week after surpassing OpenAI’s ChatGPT in downloads on Apple’s App Store. The AI model’s ability to operate with significantly fewer chips raised fears that it could reduce demand for data center infrastructure, impacting suppliers like ABB. ABB’s stock dropped nearly 6% on Monday amid these concerns.

However, Wierod said discussions with major partners and customers indicated that capital expenditure plans for data centers remain unchanged. ABB has significantly benefited from data center expansion, with its orders in this sector growing by an average of 23% per year between 2019 and 2023. The pace accelerated in 2024, with data center-related revenue now contributing 15% to ABB’s electrification business, up from 12% in 2023 and 8% in 2022.

While Wierod declined to provide a forecast for 2025, he emphasized ABB’s strong positioning in the industry, particularly in China. He also highlighted the company’s role in improving data center energy efficiency, an increasingly important factor as AI computing demand surges. ABB’s motors and variable speed drives can reduce electricity consumption by up to 60%, while its uninterrupted power supply systems operate at 97.4% efficiency when converting electricity.

The company also expects to benefit from the $500 billion AI infrastructure investment announced last week by U.S. President Donald Trump, reinforcing the long-term demand for data center solutions.

“The need for data centers and AI will be very strong in the coming years,” Wierod said. “I have no doubt.”

 

Corning Forecasts Strong Q1 Results Amid AI Infrastructure Demand

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Corning (GLW.N) has projected first-quarter revenue and profit above Wall Street estimates, driven by robust demand for optical fiber products essential for AI infrastructure.

Key Highlights:

  • AI-Driven Growth:
    • Increased adoption of AI technologies fuels demand for optical fiber used in high-speed data transfer.
  • Government Support & Infrastructure Expansion:
    • Corning is expected to benefit from the $500-billion Stargate project, aimed at expanding network connectivity.
  • Financial Performance:
    • Q1 Revenue Forecast: $3.60 billion (vs. analyst estimate of $3.53 billion).
    • Q1 Profit Forecast: $0.48-$0.52 per share (midpoint above expected $0.48).
    • Q4 Revenue: $3.87 billion (beating $3.76 billion estimate).
    • Q4 Profit: $0.57 per share (vs. expected $0.56).
  • Segment Performance (Q4 2023):
    • Optical Communications Revenue: $1.37 billion (exceeding $1.29 billion estimate).
    • Display Technologies Revenue: $971 million (slightly below expected $976.7 million).
  • Market Reaction:
    • Shares rose 5.6% in premarket trading after the announcement.

Corning’s outlook underscores its strong position in AI-driven infrastructure, particularly in telecom and high-speed data transmission.

Amazon to Invest $11 Billion in Georgia for AI and Cloud Computing Infrastructure

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Amazon Web Services (AWS), the cloud computing division of Amazon, has announced a significant $11 billion investment in Georgia to enhance its infrastructure and support the growing demand for AI technologies and cloud computing services. This move is part of a broader trend where major tech companies are allocating large sums to develop infrastructure that can accommodate the increasing needs of artificial intelligence.

The investment in Georgia will focus on data centers in Butts and Douglas counties, with Amazon expecting the project to create at least 550 new high-skilled jobs. These centers will support AI-driven innovations and cloud-based applications, which require substantial computing power. The demand for specialized data centers is rising as AI applications, such as machine learning and generative models, rely on clusters of chips to process vast amounts of data.

The growth in AI and cloud services has also led to an increase in electricity consumption in the U.S., as AI data centers consume large amounts of energy. According to an analysis by the Electric Power Research Institute, data centers could account for up to 9% of the total electricity generated in the U.S. by the end of the decade, depending on AI adoption rates. To meet this demand, Amazon has secured power supply agreements with U.S. utilities, including Talen Energy in Pennsylvania and Entergy in Mississippi.

This investment follows similar moves by other tech giants, such as Microsoft’s announcement to invest $80 billion in the development of data centers for AI models and applications. These initiatives underline the critical need for robust infrastructure to sustain the rapid growth of AI technologies.