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TE Connectivity to Acquire Richards Manufacturing for $2.3 Billion

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TE Connectivity (TEL.N) announced it will acquire utility grid products manufacturer Richards Manufacturing Co for approximately $2.3 billion in cash, aiming to bolster its position in the electrical utilities sector amid surging power demand.

The acquisition comes as the power needs of data centers are expected to double within five years due to the rapid development and adoption of artificial intelligence. Demand is projected to rise from 176 TWh in 2023 to between 325 and 580 TWh by 2028.

President Donald Trump recently supported a $500 billion investment pledge by tech companies and investors to build infrastructure for AI facilities, highlighting the sector’s growing energy demands. Additionally, aging grid infrastructure, increased extreme weather events, and a shift toward greener energy sources are driving the need for grid upgrades and more resilient systems.

TE Connectivity CEO Terrence Curtin said, “The acquisition of Richards Manufacturing aligns with our strategy and positions us to further capitalize on an accelerating grid replacement and upgrade cycle in North America.”

Following the news, TE Connectivity’s shares rose about 4% in pre-market trading.

The Galway, Ireland-based company will acquire Richards Manufacturing from funds managed by Oaktree Capital Management, L.P., and the Bier family, long-time owners of the business. The deal is expected to close in June, financed through a combination of cash and new debt.

Once completed, Richards Manufacturing will become part of TE’s Industrial Solutions segment, contributing an estimated $400 million to annual sales. The acquisition is expected to enhance TE’s sales growth and adjusted operating margins, with projected accretion of about 10 cents to adjusted EPS in the first full year.

Goldman Sachs & Co. LLC is serving as TE Connectivity’s financial advisor, with Davis Polk & Wardwell LLP providing legal counsel.

Super Micro to File Delayed Annual Report by February Deadline, Shares Rise

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Super Micro Computer (SMCI.O) announced on Tuesday that it expects to file its delayed annual and quarterly reports with the U.S. Securities and Exchange Commission (SEC) by the February 25 deadline, leading to an 8% surge in its shares after hours. The server maker had previously missed the deadline for its 10-K report after receiving subpoenas from the U.S. Department of Justice and the SEC, following short-seller Hindenburg Research’s allegations of “accounting manipulation” in August. Super Micro confirmed that it is cooperating with the authorities’ requests for documents.

The company, based in San Jose, California, also reduced its revenue forecast for fiscal 2025 due to delays in the availability of Nvidia’s (NVDA.O) Blackwell processors, a key component for its AI server systems. While the delay in filing the report was a “distraction,” Super Micro’s financial chief, David Weigand, explained that the primary issue was the delay in technology availability. Despite the challenges, Super Micro announced the full production availability of its AI server systems powered by Nvidia’s Blackwell chips last week.

Super Micro, a beneficiary of the growing demand for advanced data center infrastructure to support generative AI, now faces increasing competition from rivals like Dell (DELL.N) and HP Enterprise (HPE.N). The company has revised its fiscal 2025 net sales forecast to a range of $23.5 billion to $25 billion, down from its previous projection of $26 billion to $30 billion. The midpoint of this forecast, $24.25 billion, falls below analysts’ expectation of $24.92 billion.

For the third quarter, Super Micro is projecting net sales of $5 billion to $6 billion, lower than analysts’ estimate of $6.09 billion. In December, the company was removed from the Nasdaq-100 Index after missing its initial deadline for filing the 10-K report, though it received an extension until February 25.

Baidu CEO Stresses Continued Investment in Cloud Infrastructure Despite DeepSeek’s Success

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Baidu CEO Robin Li emphasized the ongoing need for investment in cloud infrastructure and data centers despite the recent success of DeepSeek, a Chinese AI startup. Speaking at the World Government Summit in Dubai on Tuesday, Li highlighted that while DeepSeek has demonstrated impressive efficiency in developing language models using less computing power, the demand for greater computational resources remains crucial.

“The investment in cloud infrastructure is still very much required. To develop models smarter than others, you need more compute,” Li stated, referring to the hardware that enables AI models to train, process data, and generate predictions.

DeepSeek has captured global attention for creating language models that rival leading systems like OpenAI’s GPT while utilizing significantly lower computational resources. This innovation has raised questions about the necessity for massive infrastructure investments, which has been a focal point of many AI companies’ strategies.

Baidu, one of the first Chinese companies to introduce AI products after the launch of OpenAI’s ChatGPT in late 2022, has developed its large language model, Ernie, which the company claims matches the capabilities of GPT-4. However, Ernie has seen limited adoption in the market.

Li, known for making bold statements about China’s AI industry, acknowledged the unexpected nature of innovation, citing DeepSeek’s rapid success as an example. “You just don’t know when and where innovations come from,” Li remarked.

The CEO also noted that the pressure to reduce costs and overcome compute constraints has driven Chinese companies like Baidu to innovate more efficiently. In an apparent shift from his earlier stance, Li recognized the potential of open-source approaches to accelerate AI development. “If you open things up, many people will be curious enough to try it. This will help spread the technology much faster,” he added.